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Exam 18: Corporations

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Question 31

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If a shareholder's derivative suit is successful,any damages recovered normally go into the corporation's treasury.

A) True
B) False

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Question 32

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A benefit corporation is designed to make a profit and thereby provide long-term shareholder benefit.

A) True
B) False

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Question 33

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If a board attempts to manipulate the shareholders' election of a director to reduce the shareholders' influence,they can challenge the election in court.

Shareholders' assumption of personal liability,as guarantors,for the obligations of a corporation can enable the firm to obtain credit.

Huan is a shareholder of Insulation Inc.When the directors fail to undertake an action to redress a wrong suffered by the firm,Huan files a suit on its behalf.Any damages recovered by the suit will go to the firm's

Because corporate officers have the implied power to bind the firm in matters directly connected to its business,there is no limit to what the officer can do.

Pipe Inc.'s stated purpose is to install plumbing.Pipe contracts with Quality Contracting to pour a new building's foundation despite lacking the skill and license to do such work.This is most likely

Because the management of a close corporation can resemble that of a sole proprietorship,the firm need not meet all of the specific requirements set forth in state statutes for corporations.

Oversight Inc.'s board of directors votes to empower corporate officers to make decisions regarding ordinary,daily corporate affairs within well-defined guidelines.With respect to these affairs,Oversight's board

The primary document needed to incorporate a business is the articles of incorporation because the articles serve as a primary source of authority for the firm's organization and functions.

A corporation is an artificial being-intangible,invisible,and existing only in the contemplation of the law.

Integrated Devices,Inc. ,is a private,for-profit corporation that is owned by seven shareholders who are members of the same family.Integrated is

Oil Industries Inc.is a private,for-profit corporation that is owned by five shareholders who are members of the same family.Po,the majority shareholder,misappropriates company funds.The shareholders whose interests are injured by Po's misconduct should

Roz,a director of Soy Inc. ,is specially trained in petroleum trading.Soy's board approves several deals in which the company pays too much for soybeans.Roz approves all the deals without first reviewing them.Roz is most likely liable for breach of

EZ Hauling holds itself out to customers as being a corporation but makes no attempt to incorporate.In this circumstance,EZ Hauling is most likely

Owen is a director of Packaging Company.As a director,Owen's rights include a right to

Blue Sky Drones Inc.has three directors,a president,two vice presidents,a secretary,and a treasurer.Carol is a Blue Sky director.In most states,Carol can also hold a corporate office

A breach of fiduciary duties by those who own a close corporation normally constitutes what is known as oppressive conduct.

Burgers & Brew Inc.prepares its articles of incorporation.The articles are likely to include

If a director commits a breach of fiduciary duty,the shareholders have the inherent power to remove the director from office by a majority vote.