Question 1

Under the Statutory Close Corporation Supplement to the MBCA,a close corporation may operate without a board of directors.

Accepted Answer

A) True 
 B)False

Question 2

A director's right of inspection of corporate books and records is:

Accepted Answer

A)  similar to a shareholder's right to inspect. 
B)  considerably broader than a shareholder's right,but is still subject to limitations. 
C)  narrower than a shareholder's right. 
D)  unnecessary for most directors,since the books and records relate to officers' duties,not directors' duties. 
A)  similar to a shareholder's right to inspect. 
B)  considerably broader than a shareholder's right,but is still subject to limitations. 
C)  narrower than a shareholder's right. 
D)  unnecessary for most directors,since the books and records relate to officers' duties,not directors' duties.

Question 3

The board of directors generally manages the day-to-day affairs of the company.

Accepted Answer

A) True 
 B)False

Question 4

An officer who breaches the fiduciary duty to the corporation will be:

Accepted Answer

A)  discharged,but not required to pay anything. 
B)  required to return to the corporation profits obtained through breach of a fiduciary duty and forfeit the right to compensation during the period of the breach 
C)  required to pay back all compensation received during the period of the breach. 
D)  None of these. 
A)  discharged,but not required to pay anything. 
B)  required to return to the corporation profits obtained through breach of a fiduciary duty and forfeit the right to compensation during the period of the breach 
C)  required to pay back all compensation received during the period of the breach. 
D)  None of these.

Question 5

Currently,Julia Lee is vice president of Lessing Corporation.Under the Revised Act,Julia will not be permitted to also hold the office of treasurer.

Accepted Answer

A) True 
 B)False

Question 6

A shareholder may not vote without being at the shareholder meeting.

Accepted Answer

A) True 
 B)False

Question 7

The board of directors appoints the officers of the corporation,who are agents of the corporation.

Accepted Answer

A) True 
 B)False

Question 8

Directors have the power to bind the corporation when acting individually rather than as a board.

Accepted Answer

A) True 
 B)False

Question 9

Ryan is a shareholder of Sigma Corp.He has evidence to suggest that its president/CEO has allowed the corporation to engage in acts that are ultra vires.Based upon this evidence,Ryan contacts an attorney and sues the corporation on behalf of the corporation.The lawsuit Ryan has filed is known as a(n):

Accepted Answer

A)  direct suit. 
B)  derivative suit. 
C)  class action suit. 
D)  unauthorized suit. 
A)  direct suit. 
B)  derivative suit. 
C)  class action suit. 
D)  unauthorized suit.

Question 10

Directors,but not officers,may compete with the corporation in their own private business dealings.

Accepted Answer

A) True 
 B)False

Question 11

The nominating committee of the board of directors actually determines the board's membership because:

Accepted Answer

A)  they are the only ones who can vote on this matter. 
B)  virtually all shareholders who vote for directors do so through the use of a proxy,and the majority of shareholders who return their proxies vote as management advises. 
C)  very few institutional investors exercise their right to vote their shares,so the choice of the nominating committee usually prevails. 
D)  most individual investors exercise their right to vote their shares,and they tend to rely on the recommendation of the nominating committee. 
A)  they are the only ones who can vote on this matter. 
B)  virtually all shareholders who vote for directors do so through the use of a proxy,and the majority of shareholders who return their proxies vote as management advises. 
C)  very few institutional investors exercise their right to vote their shares,so the choice of the nominating committee usually prevails. 
D)  most individual investors exercise their right to vote their shares,and they tend to rely on the recommendation of the nominating committee.

Question 12

The officers determine the capital structure and financial policy of the corporation.

Accepted Answer

A) True 
 B)False

Question 13

A proxy is revocable to the same extent as an agency.

Accepted Answer

A) True 
 B)False

Question 14

Members of the board of directors may not determine their own compensation.

Accepted Answer

A) True 
 B)False

Question 15

A quorum will consist of a majority of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 16

During the past twenty years or so,inside directors' number and influence in most large corporations have increased dramatically.

Accepted Answer

A) True 
 B)False

Question 17

Under the Model Act and in a majority of the states,a quorum of shareholders at an annual meeting may be not less than ____ percent of the shares entitled to vote.

Accepted Answer

A)  10 
B)  33 1/3 
C)  66 2/3 
D)  50 
A)  10 
B)  33 1/3 
C)  66 2/3 
D)  50

Question 18

The shareholders elect the key corporate officers.

Accepted Answer

A) True 
 B)False

Question 19

Management can be offered shares of the corporation at favorable prices if other shareholders are excluded from that offer.

Accepted Answer

A) True 
 B)False

Question 20

The board of directors is delegated the power to manage the business of the corporation,which includes:

Accepted Answer

A)  determining the capital structure and financial policy of the corporation. 
B)  declaring the amount and type of dividends. 
C)  formulating major management policy. 
D)  All of these. 
A)  determining the capital structure and financial policy of the corporation. 
B)  declaring the amount and type of dividends. 
C)  formulating major management policy. 
D)  All of these.

Exam 35: Management Structure

Under the Statutory Close Corporation Supplement to the MBCA,a close corporation may operate without a board of directors.

A director's right of inspection of corporate books and records is:

The board of directors generally manages the day-to-day affairs of the company.

An officer who breaches the fiduciary duty to the corporation will be:

Currently,Julia Lee is vice president of Lessing Corporation.Under the Revised Act,Julia will not be permitted to also hold the office of treasurer.

A shareholder may not vote without being at the shareholder meeting.

The board of directors appoints the officers of the corporation,who are agents of the corporation.

Directors have the power to bind the corporation when acting individually rather than as a board.

Directors,but not officers,may compete with the corporation in their own private business dealings.

The nominating committee of the board of directors actually determines the board's membership because:

The officers determine the capital structure and financial policy of the corporation.

A proxy is revocable to the same extent as an agency.

Members of the board of directors may not determine their own compensation.

A quorum will consist of a majority of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

During the past twenty years or so,inside directors' number and influence in most large corporations have increased dramatically.

Under the Model Act and in a majority of the states,a quorum of shareholders at an annual meeting may be not less than ____ percent of the shares entitled to vote.

The shareholders elect the key corporate officers.

Management can be offered shares of the corporation at favorable prices if other shareholders are excluded from that offer.

The board of directors is delegated the power to manage the business of the corporation,which includes:

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms

Legal Topics in Property Ownership and Management