Business law topic 5 Flashcards
What defines the corporate bodies within capital companies?
a) Only the directors and their assistants.
b) Members and legal representatives (directors).
c) Solely the shareholders with the largest investments.
d) The external auditors and financial advisors.
Answer: b) Members and legal representatives (directors).
Explanation: Corporate bodies in capital companies are fundamentally composed of the members (or shareholders/investors) who contribute capital, and the legal representatives (or directors), who are selected for their trustworthiness to manage the company.
What is the key function of the general meeting within a capital company?
a) To solely discuss the company’s marketing strategies.
b) To form the will of the members on various company matters.
c) Only to appoint new employees and discuss operational matters.
d) To review and approve social media policies.
Answer: b) To form the will of the members on various company matters.
Explanation: The general meeting is a pivotal corporate body tasked with making decisions on crucial company matters, including financial decisions, structural changes, and director appointments, reflecting the collective will of the members.
Who is responsible for convening the general meeting?
a) The directors/administrative body.
b) The company’s external legal counsel.
c) Any member who holds more than 1% of shares.
d) The newest member of the company.
Answer: a) The directors/administrative body.
Explanation: It is primarily the responsibility of the company’s directors or the administrative body to convene the general meeting, ensuring members are informed about the meeting’s agenda, place, day, and time.
Which statement is true regarding the legal process for general meetings?
a) Members adopt agreements directly without following any legal process.
b) A formal announcement must precede the meeting, informing members about various details including the agenda.
c) Universal general meetings require extensive prior notice.
d) Electronic voting is forbidden in all types of general meetings.
Answer: b) A formal announcement must precede the meeting, informing members about various details including the agenda.
Explanation: General meetings follow a legal process that includes announcing the meeting to members, detailing the place, day, time, and agenda, ensuring the meeting’s decisions are valid and recognized.
What accurately describes the managing body’s competencies in a capital company?
a) Legal representation and top management of the company.
b) Managing daily operational tasks and employee scheduling.
c) Focusing solely on external communication and public relations.
d) Directly handling all sales and purchase transactions.
Answer: a) Legal representation and top management of the company.
Explanation: The managing body or directors of a capital company are tasked with its legal representation and overseeing the top management decisions, holding a broad discretion in their role without interference from the general meeting on operational decisions.
Which of the following is NOT a mode of organizing the managing body?
a) A single director.
b) Joint and several directors.
c) Board of directors.
d) External non-member management consortium.
Answer: d) External non-member management consortium.
Explanation: While the managing body can be organized as a single director, joint and several directors, or a board of directors, an “external non-member management consortium” is not a recognized form for organizing the company’s management.
How is the term of directors determined in a capital company?
a) By the company’s annual revenue.
b) Appointment by the general meeting and duration as expressed in the statutes.
c) Directors serve for life unless they choose to resign.
d) Automatically renewed every year without need for reappointment.
Answer: b) Appointment by the general meeting and duration as expressed in the statutes.
Explanation: Directors are appointed by the general meeting, and their term is determined by the company’s statutes, with specific durations set for different types of companies (S.A. or S.R.L.).
