Exam 44: Shareholder Rights in Corporations

Outstanding shares of stock have been issued to stockholders.

Pursuant to the __________ theory, when a corporation is so dominated and controlled by a single shareholder that the separate personalities of the shareholder and the corporation no longer exist, courts will ignore the corporate entity and hold the shareholder personally liable.

Another term for par value is book value.

Under the RMBCA, a preincorporation subscription agreement is irrevocable for three (3) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation.

If a shareholder borrows money and delivers stock as collateral security, the creditor has a perfected security interest in the stock without any filing by the creditor.

A preincorporation subscription to stock is generally treated as an agreement to buy the stock when the corporation is formed.

Common stock cannot has priority over preferred stock with respect to dividends.

Shareholders exercise direct control over their corporation.

A wasting asset corporation is designed to exhaust the assets of the corporation.

Restrictions on the transfer of stock are always valid.

A shareholder may make an absolute transfer of stock or may transfer it merely as collateral to secure the payment of a debt.

Dividends are payable in any of the following ways except:

The two most common instruments used to provide the capital structure of a corporation are stocks and bonds.

If Bob owns 100 shares of stock for which he paid $1,000 to the corporation, the _______ would be $10 per share.

An interest in a corporation is based on the ownership of one or more shares of stock of the corporation.

Until a transfer is recorded on its books, a corporation is entitled to treat the person whose name is on its books as the owner of its stock.

Each shareholder has an absolute right to annual dividends.

Corporate securities evidenced by a certificate are negotiable.

If Bruce signs an agreement to purchase Joe's shares in ABCo. the stock sales contract is called an indenture.

Delivering stock to a creditor as security for a debt owed by the shareholder: