Checkpoint Misc.

Question 1

If a corporations stock is restricted by a buy-sell agreement, then when a shareholder tries to sell

Answer 1

the offeree is under a mandatory requirement to purchase the shares upon a triggering event

Question 2

If a corporation’s stock is under a first-offer restriction, then when a shareholder tries to sell

Answer 2

they must first offer the offeree the right to purchase the shares

Question 3

When is a shareholder entitled to preemptive rights?

Answer 3

Only when provided for in the articles of incorporation

Question 4

What must happen for an assignee of a membership interest in an LLC to become a member?

Answer 4

There must be unanimous consent of the other members

Question 5

Notice of a meeting to vote on a plan of merger must be given to

Answer 5

All shareholders, regardless of their ability to vote

Question 6

What is a short-form merger?

Answer 6

A parent corp that owns at least 90% of each class of its subsidiary corp’s shares may merge the subsidiary into itself without the approval of the shareholders of either the parent or the subsidiary.

Question 7

To assert dissenter’s rights against a proposed fundamental change, a shareholder must

Answer 7

1) inform the corp. of a demand to be paid for his shares if the action is taken; and,
2) abstain from voting for the measure (do not need to vote against)

Question 8

If a corporation fails to file an annual report, the Secretary of State may

Answer 8

dissolve the corp.

Question 9

The dissolving of a corporation is effective upon,

Answer 9

The filing of the articles of dissolution with the secretary of state.

Question 10

Dissolution requires how many votes?

Answer 10

The majority of all votes entitled to vote

-Beyond a majority of a quorum, look at all possible voters

Question 11

Inadequacy of capitalization can pierce the corporate veil, when?

Answer 11

Corporate formalities are not observed

• Bank accounts are not separate
• No taxes are filed

Question 12

What can be exchanged for share’s in a corporation?

Answer 12

Any tangible or intangible property or benefit to the corporation

Question 13

The rights and obligations of shareholders with v. shareholders without certificates

Answer 13

Are identical

Question 14

What about shares must the articles of incorporation include?

Answer 14

1. The classes of shares; and,

2. The number of shares in each class

Question 15

If a promoter does not disclose all the material facts concerning an asset the promoter sells to the corporation, the corporation may

Answer 15

Avoid the contract

Question 16

What is a voting agreement?

Answer 16

An agreement between shareholders that their shares be voted as provided in the agreement.

Voting agreements do not transfer legal title

Question 17

What is are the requirements of a voting trust?

Answer 17

1. Legal title of the shares are transferred

2. A copy of the trust instrument must be sent to the corporate office

Question 18

Derivative Suits: Exception to ownership at time of injury?

Answer 18

If the S/H received the shares as a matter of law (inheritance) from someone who did hold the shares at the time of injury.