Question 1

Bea is a shareholder of Candy Confections Corporation.The right to inspect corporate books and records is

Accepted Answer

A) held by Bea only if she is a director. 
B) held by Bea,without restrictions. 
C) held by Bea,with some restrictions. 
D) not held by Bea. 
A) held by Bea only if she is a director. 
B) held by Bea,without restrictions. 
C) held by Bea,with some restrictions. 
D) not held by Bea. C

Question 2

Rhea is a director of Spex Corporation,which makes and sells sunglasses and other eyewear.As a Spex director,Rhea is

Accepted Answer

A) a trustee because Rhea occupies a position of trust over Spex. 
B) a trustee because Rhea holds title to Spex's property for the use and benefit of others. 
C) not a trustee because Rhea does not hold title to Spex's property for the use and benefit of others. 
D) not a trustee because Rhea is not in a position of trust over Spex. 
A) a trustee because Rhea occupies a position of trust over Spex. 
B) a trustee because Rhea holds title to Spex's property for the use and benefit of others. 
C) not a trustee because Rhea does not hold title to Spex's property for the use and benefit of others. 
D) not a trustee because Rhea is not in a position of trust over Spex. C

Question 3

Egan is a director of First Realty Corporation.As a director,Egan can act as an agent to bind First Realty

Accepted Answer

A) in all circumstances. 
B) in no circumstances. 
C) to any contract in which Egan does not have a conflict of interest. 
D) to any contract that represents a corporate opportunity for First Realty. 
A) in all circumstances. 
B) in no circumstances. 
C) to any contract in which Egan does not have a conflict of interest. 
D) to any contract that represents a corporate opportunity for First Realty. B

Question 4

Persons whose names appear in a corporation's stock book are ordinarily entitled to notice of shareholders' meetings and the right to vote.

Accepted Answer

A) True 
 B)False

Question 5

A dividend may be paid from undistributed net corporate profits.

Accepted Answer

A) True 
 B)False

Question 6

Directors are required to exercise a reasonable amount of supervision over the corporate officers.

Accepted Answer

A) True 
 B)False

Question 7

Preemptive rights entitle shareholders to bring a derivative suit against the corpora?tion.

Accepted Answer

A) True 
 B)False

Question 8

Coast-to-Coast Distribution,Inc. ,is a direct-mail distribution company.Like most corporations,Coast-to-Coast's employees include its

Accepted Answer

A) board of directors. 
B) incorporators. 
C) officers. 
D) shareholders. 
A) board of directors. 
B) incorporators. 
C) officers. 
D) shareholders.

Question 9

A person must be a shareholder of a corporation to serve as a director.

Accepted Answer

A) True 
 B)False

Question 10

A stock warrant is a distribution of corporate profits or income.

Accepted Answer

A) True 
 B)False

Question 11

A corporate officer is not expected to be informed on corporate matters.

Accepted Answer

A) True 
 B)False

Question 12

No state permits a corporate board to have fewer than three directors.

Accepted Answer

A) True 
 B)False

Question 13

A director is a fiduciary of a corporation.

Accepted Answer

A) True 
 B)False

Question 14

Rosa and Sean are directors of Tech,Inc.The right of Rosa and Sam to be notified of special meetings of the board is the right to

Accepted Answer

A) compensation. 
B) indemnification. 
C) participation. 
D) preemption. 
A) compensation. 
B) indemnification. 
C) participation. 
D) preemption.

Question 15

Odell,Prince,and Quinn are shareholders of Rite Corporation.Before a shareholders' meeting,they agree in writing to vote their shares together in a certain manner.Usually,such agreements are held to be

Accepted Answer

A) invalid and unenforceable. 
B) oppressive and irresponsible. 
C) suspect and voidable. 
D) valid and enforceable. 
A) invalid and unenforceable. 
B) oppressive and irresponsible. 
C) suspect and voidable. 
D) valid and enforceable.

Question 16

Rafi,a director of Super Service Station Corporation,does not attend a board meet?ing for three years.During that time,Twyla,Super's president,makes improper loans that cost the company $100,000.Rafi is most likely

Accepted Answer

A) liable for negligence or mismanagement. 
B) liable for violation of the business judgment rule. 
C) not liable because missing meetings is an honest mistake. 
D) not liable because missing meetings is only poor judgment. 
A) liable for negligence or mismanagement. 
B) liable for violation of the business judgment rule. 
C) not liable because missing meetings is an honest mistake. 
D) not liable because missing meetings is only poor judgment.

Question 17

Shareholders have no right to manage a corporation.

Accepted Answer

A) True 
 B)False

Question 18

In all states,Sports Fitness Club Company and other corporations can pay dividends from

Accepted Answer

A) gross profits. 
B) net profits. 
C) retained earnings. 
D) surplus. 
A) gross profits. 
B) net profits. 
C) retained earnings. 
D) surplus.

Question 19

The ownership right to stock exists independently of the stock certificate.

Accepted Answer

A) True 
 B)False

Question 20

Shareholders own a corporation.

Accepted Answer

A) True 
 B)False

Exam 26: Corporate Directors, officers, and Shareholders

Bea is a shareholder of Candy Confections Corporation.The right to inspect corporate books and records is

Rhea is a director of Spex Corporation,which makes and sells sunglasses and other eyewear.As a Spex director,Rhea is

Egan is a director of First Realty Corporation.As a director,Egan can act as an agent to bind First Realty

Persons whose names appear in a corporation's stock book are ordinarily entitled to notice of shareholders' meetings and the right to vote.

A dividend may be paid from undistributed net corporate profits.

Directors are required to exercise a reasonable amount of supervision over the corporate officers.

Preemptive rights entitle shareholders to bring a derivative suit against the corpora?tion.

Coast-to-Coast Distribution,Inc. ,is a direct-mail distribution company.Like most corporations,Coast-to-Coast's employees include its

A person must be a shareholder of a corporation to serve as a director.

A stock warrant is a distribution of corporate profits or income.

A corporate officer is not expected to be informed on corporate matters.

No state permits a corporate board to have fewer than three directors.

A director is a fiduciary of a corporation.

Rosa and Sean are directors of Tech,Inc.The right of Rosa and Sam to be notified of special meetings of the board is the right to

Odell,Prince,and Quinn are shareholders of Rite Corporation.Before a shareholders' meeting,they agree in writing to vote their shares together in a certain manner.Usually,such agreements are held to be

Rafi,a director of Super Service Station Corporation,does not attend a board meet?ing for three years.During that time,Twyla,Super's president,makes improper loans that cost the company $100,000.Rafi is most likely

Shareholders have no right to manage a corporation.

In all states,Sports Fitness Club Company and other corporations can pay dividends from

The ownership right to stock exists independently of the stock certificate.

Shareholders own a corporation.

The Legal and Constitutional Environment of Business

Traditional and Online Dispute Resolution

Ethics and Business Decision Making

Torts and Cyber Torts

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Classification

Agreement and Consideration

Capacity and Legality

Defenses to Contract Enforceability

Third Party Rights and Discharge

Breach and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title and Risk of Loss

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

Negotiability, transferability, and Liability

Checks and Banking in the Digital Age

Security Interest in Personal Property

Creditors Rights and Bankruptcy

Agency Relationships

Employment Law and Immigration

Sole Proprietorships, partnerships, Ltd Liability

Corporate Formation, financing, and Termination

Investor Protection, insider Trading, Corpgov

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance, wills, and Trusts

Liability of Accountants Other Professionals

International Law in a Global Economy

Regulations, Contracts, and Discovery

Legal Issues in Business and Commerce

Legal Issues in Online Relationships and Agreements

Contracts and Consumer Protection

Liability of Silverado Bank in Prestridge v. Bank of Jena for Forged Checks.

Sovereign Immunity and Bankruptcy Law

Legal Issues in Employment and Liability Cases

Corporate Governance and Securities Law

Real Estate Law: Cases and Controversies

Corporate Ownership and Liability in Chilean Firms

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