Exam 16: Governance and Structure: the Law of Business Associations

Allied Van Lines has structured its company by giving its franchisees stock ownership in the company. On the stock is the following language: NOTE: Restrictions apply to ownership of this stock. Only franchisees and employees of Allied Van Lines can own this stock. In the event of a franchise or employment termination, the stock must first be offered to the Allied Board for purchase. Is the restriction valid?

Subchapter S or S Corporation shareholders have personal liability for corporate debts.

Members of limited liability companies have no right to vote on who should manage their companies.

Limited partners:

A copy of the voting trust must be on file in the corporate records.

Watered shares result:

A group of attorneys who wish to incorporation would probably form a:

Lawyers for corporations are required to report misconduct by the corporation to the SEC after they have exhausted all means for an internal correction.

The corporate veil liability theory has been applied in situations that involve environmental clean-up issues.

LLCs have existed in Europe and South America prior to their existence in the U.S.

Unanimous consent of the partners is required for:

Limited partners can take a management role and remain limited partners.

Stock transfer restrictions are void.

A, B, and C are partners in a real estate firm. B has just died. B's widow:

The statutory agent is the party who will be served with lawsuits against the corporation.

How can the presumption of a partnership by profit sharing be overcome?

A corporation is only a domestic corporation in its state of incorporation.

Limited partners can consult and advise with the general partner and still retain limited liability.

A proposed merger of two corporations:

The sale of the goodwill of a partnership requires unanimous consent.