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Corporations (BLAW) Flashcards | StudBud
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Corporations (BLAW)
Corporations (BLAW)
16 terms
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StudBud Administration
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438 plays
#Corporate #law issues
Flashcards
16 cards
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Questions
16
Answers
1
Minority shareholders can bring an oppression action against the directors and the company when
none of the above
their shares are being devalued because of director action
the directors make poor financial decisions
directors are paying themselves salaries
2
The limited liability company is an ingenious invention because it
gives shareholders unlimited potential gain but limited risk
protects the rights of directors
gives shareholders unlimited liability but limited gain
assists bondholders in securing their interest payments
3
A restriction on transfer of shares is usually imposed where the corporation is closely held
False
True
4
A shareholder has the duty not to
none of the above
compete with the corporation
borrow money from the corporation
compete with the directors of the corporation
5
A corporation does not die but may be dissolved.
True
False
6
A closely held corporation is distinguished by its shares not being sold on the stock market.
False
True
7
A bondholder is a participant in the corporation not a creditor
True
False
8
The preferred shareholders have the right to be paid dividends
and to receive a pro rata share of the company's profits
before bondholders receive interest
before the company returns principal to the bondholders
before common shareholders receive their dividends
9
Shareholders have a duty to act in the best interests of the corporation
False
True
10
A basis of the oppression action is that
the minority's equity is unfairly reduced by the majority
the majority's equity is unfairly reduced by the minority
the majority is oppressing the directors
the directors are oppressing the creditors
11
A preemptive right in relation to the issue of new shares in a company means that
shareholders cannot buy the new shares in the same company
shareholders get to buy the new shares before others
None of the above
shareholders can sell their shares to anyone
12
Where a corporation borrows money, only it is responsible for the debt, not the shareholders
False
True
13
Directors may be held personally liable for which of the following?
Unpaid taxes
Damage to the environment
All of the above
Unpaid wages
14
In which of the following is a fiduciary duty owed?
Directors of the company to the shareholders
Principal to agent
Directors to the company
Officers of a company to the shareholders
15
Selling shares can be a means of providing capital from a large number of sources
True
False
16
To lift the corporate veil means
to compel shareholders to buy more shares
to compel creditors of the company to abandon their claims
to remove the company's separate legal identity
to cure bad accounting by lifting losses to profits
