Deck 36: Management and Dissolution of a Corpora

Question 1

Which of the following is an example of cumulative voting?

A) Dan and Ben own ten shares together and two directors are to be elected, so they receive the right to cast 12 votes.
B) Dan owns two shares and two directors are to be elected, but he receives no rights to cast a vote.
C) Dan owns six shares and two directors are to be elected, so he receives the right to cast six votes.
D) Dan owns ten shares, and five directors are to be elected, so he receives the right to cast 50 votes.

Answer 1

D

Question 2

Which of the following best describes whistleblowers?

A) They are people who take part in insider trading activities.
B) They are a group of people engaged in stock taxation.
C) They are people who expose wrongdoing in an organization.
D) They are people who subscribe for fresh capital stock.

Answer 2

C

Question 3

Each stockholder has two votes for each share of common stock owned.

Answer 3

False

Question 4

When a corporation is dissolved:

A) it can issue capital stock to existing shareholders.
B) it can continue to sue third-parties and other organizations.
C) it can form contracts for the purpose of converting assets into cash.
D) it can transfer property to other corporations.

Question 5

Which of the following best describes a proxy?

A) A person authorized to vote for another
B) A person who relinquishes his right to vote
C) A person authorized to sell the company's stock
D) A person authorized to act as another's agent in buying transactions

Question 6

A merger occurs when two corporations combine to form a new corporation.

Question 7

A corporation may terminate its existence before surrendering its articles of incorporation.

Question 8

As fiduciaries of the corporation, directors incur liability for losses when they are caused by bad faith.

Question 9

Which of the following is true of a quorum?

A) Statutes, bylaws, or the articles of incorporation enable voting proxy in a quorum.
B) It is a maximum number of debentures that must be represented in order that business may be lawfully transacted.
C) A stockholder's proxy cannot vote on his behalf in a convened meeting.
D) Under the common law, a quorum consists of the stockholders represented by proxy at a properly convened meeting.

Question 10

Which of the following best describes preemptive rights?

A) It is the right to purchase additional stock from the stock exchange.
B) It is the right to sell existing shares back to the corporation.
C) It is the right to purchase shares before the incorporation of a company.
D) It is the right to purchase fresh capital stock in proportion to shares owned.

Question 11

Explain any three rights of stockholders.

Question 12

Stockholders cannot carry out a motion to elect a new board of directors.

Question 13

Which of the following is true of a corporation?

A) It is an artificial being, existing only in contemplation of law.
B) Directors of a corporation as a group do not represent the corporation as agents.
C) Stockholders perform all the administrative functions of the corporation.
D) Stockholders directly control the day to day activities of a corporation.

Question 14

A _____ of two corporations occurs when they combine so that one survives and the other ceases to exist.

A) dissolution
B) merger
C) buyout
D) consolidation

Question 15

Attempts by competing sides to secure majority of stockholders' votes are known as proxy wars.

Question 16

The board of directors is the primary policy-making body of the corporation.

Question 17

A stockholder has the right to receive a proportionate share of the profits when profits are distributed as dividends.

Question 18

The directors of a corporation as a group act as fiduciaries.

Question 19

The directors of an organization do not have the power to delegate authority to any of its members to act for the corporation.

Question 20

A foreign corporation whose authority to do business in the state has been revoked is allowed to form contracts.