Exam 35: Management Structure of Corporations

Under the Revised Act and an increasing number of other statutes, by a majority vote, shareholders may remove the entire board of directors without cause.

Determining the names of other shareholders in order to communicate with them about corporate affairs is a "proper purpose" for a shareholder to inspect the books and records of a corporation.

The business judgment rule would require an officer or director to use the highest duty of care in the execution of his office.

Directors who are also officers or employees of a publicly held corporation are "affiliated directors."

Unissued shares and treasury stock must be counted to see if a quorum exists.

The Revised Act requires that demand be made upon the board of directors to enforce the corporate right at issue as a prerequisite to bringing a derivative suit.

Which of the following would be likely to result in liability to a director of a textile company?

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

Discuss the business judgment rule.

The remedy for a director's breach of fiduciary duty is:

Which of the following is untrue about a corporation's ratification of an act of an officer?

Under the MBCA, a quorum of shareholders at an annual meeting may be not less than what percentage of the shares entitled to vote?

The Revised Act requires dismissal of a derivative suit if qualified (disinterested) directors determine, in good faith after conducting a reasonable inquiry that maintenance of the derivative suit is not in the best interests of the corporation.

How does the management structure of a closely held corporation differ from that of a publicly traded corporation?

Directors are elected at the annual meeting of shareholders.

Which of the following is/are director(s) in publicly held corporations?

Theodore, as treasurer of Komand Corporation, had the duty to invest corporate earnings as he deemed best for the company.When Komand Corporation went public, the new board decided that a committee of the officers would make such investment decisions.If Theodore thereafter unilaterally contracted to purchase investment securities with corporate earnings as he had done many times before, such contract would be valid:

Explain the reasons why the accountability of the management of a corporation is a cultural issue.

Incorporation statutes generally require that each share of stock issued carry voting rights.

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