Business law topic 6 Flashcards
Who can propose amendments to a capital company’s by-laws?
a) Only the CEO of the company.
b) The managing body or members owning at least 5% of shares.
c) External stakeholders with vested interests.
d) Any employee of the company.
Answer: b) The managing body or members owning at least 5% of shares.
Explanation: Amendments to the by-laws can be proposed by the managing body or by members who collectively hold a minimum of 5% of the company’s shares, highlighting their vested interest in the company’s governance.
What is required for the modification of by-laws regarding the transfer of the registered office within national territory?
a) Also the competence of the managing body unless expressly prohibited by the by-laws.
b) Approval from all members regardless of shareholding.
c) A unanimous decision from the board of directors only.
d) Public announcement and approval from the local chamber of commerce.
Answer: a) Also the competence of the managing body unless expressly prohibited by the by-laws.
Explanation: The transfer of the registered office within the national territory can be decided by the managing body, unless the by-laws specifically restrict this authority, showcasing the flexibility within national boundaries
Which of the following is NOT a step in the procedure for by-laws modifications?
a) Drafting of a written report by the managing body.
b) Obtaining approval from the national government.
c) Convening a general meeting to discuss the proposed changes.
d) Registration of the modification in the Commercial Register.
Answer: b) Obtaining approval from the national government.
Explanation: The process for modifying by-laws does not require government approval, emphasizing the autonomous governance of companies within the legal framework provided by the Commercial Register and the LSC.
What triggers the right of separation for a member in the context of by-law amendments?
a) Any change in the company’s name.
b) Minor modifications to the company’s objective.
c) Substantial modification of the corporate purpose.
d) Adjustments to the dividend policy.
Answer: c) Substantial modification of the corporate purpose.
Explanation: Members are granted a right of separation if there is a substantial modification of the company’s corporate purpose, reflecting the significance of aligning members’ interests with the company’s objectives.
What motivates a capital increase in a company?
a) A desire to decrease the company’s equity.
b) The need to enhance the company’s liquidity or solvency.
c) The requirement to reduce the number of shareholders.
d) An intention to limit the company’s market expansion.
Answer: b) The need to enhance the company’s liquidity or solvency.
Explanation: A capital increase is typically motivated by the need to improve the company’s financial health, either through enhancing liquidity or strengthening solvency, facilitating growth, or other strategic initiatives.
Which type of capital increase requires total disbursement of the previous shares in an S.A.?
a) Increase with monetary contributions.
b) Increase by converting liabilities into equity.
c) Increase through adjustment of the company’s market valuation.
d) Capital increase aimed at specific technological investments.
Answer: a) Increase with monetary contributions.
Explanation: A capital increase involving monetary contributions in an S.A. requires that the previous shares be fully disbursed, ensuring a solid financial basis for the expansion of capital.
What is NOT a modal type of capital reduction?
a) Reduction to compensate for accumulated losses.
b) Reduction for the purpose of increasing managerial bonuses.
c) Reduction aimed at returning contributions to members.
d) Reduction for the constitution or increase of reserves.
Answer: b) Reduction for the purpose of increasing managerial bonuses.
Explanation: Capital reduction strategies are utilized for financial rebalancing, such as compensating losses or returning contributions to members, not for increasing managerial bonuses, which would not be a legally justifiable purpose.
Which condition must be met for creditors to oppose a capital reduction in an S.A.?
a) The creditors must hold at least 10% of the company’s debt.
b) Creditors with unsecured credits when the value of the equity decreases as a result of the reduction.
c) All creditors automatically oppose any form of capital reduction.
d) Only international creditors have the right to oppose.
Answer: b) Creditors with unsecured credits when the value of the equity decreases as a result of the reduction.
Explanation: Creditors holding unsecured credits are granted the right to oppose a capital reduction specifically when such reduction results in a decrease of the company’s equity value, safeguarding their interests.
What is a capital increase charged to reserves?
a) An increase facilitated by external investments.
b) Utilizing available reserves to increase capital.
c) A mandatory increase imposed by regulatory authorities.
d) An increase executed to specifically dilute existing shareholders’ equity.
As.
Answer: b) Utilizing available reserves to increase capital.
Explanation: A capital increase charged to reserves involves reallocating a portion of the company’s accumulated reserves to its capital, enhancing the company’s financial structure without immediate external contributions.
