Corporations

Question 1

Name of Corp must include words

Answer 1

Corporation,
Company
Incorporated
Or an abbreviation thereof

Question 2

What is statutory cap for liability of directors for damages?

Answer 2

$100k

Question 3

How can corporations reduce or eliminate liability if it’s directors/officers?|

Answer 3

By laws or articles

Question 4

Who may fill vacancy on directors of a corporation

Answer 4

Board of directors

Question 5

What must occur for the board of directors to take an action at a meeting

Answer 5

A majority of directors must approve of action where there is a quorum

Question 6

A person may become a member of a manager-managed LLC if

Answer 6

A majority of the managers of the LLC consent

Question 7

can a person become a member of an LLC without making a contribution, monetary or otherwise, to the LLC?

Answer 7

Yes

Question 8

A promoter is generally ___ liable for

Answer 8

personally liable for actions on behalf of an unincorporated business even after the business is incorporated, unless a subsequent novation releases the promoter from liability.

Question 9

board may delegate to a committee the authority to fix the amount and terms of the distribution if

Answer 9

board has authorized a distribution and set sufficient parameters

Question 10

A restriction on the transfer of stock can be enforceable against a transferee who takes the stock

Answer 10

W knowledge of the restriction

Question 11

placement of a notation regarding a transfer restriction on a stock certificate ensures that the transferee is deemed to have

Answer 11

Knowledge of the restriction

Question 12

Under the default rules, provided there is a quorum, how many votes cast are required for the election of a director by the shareholders

Answer 12

Plurality of votes cast

Question 13

When shareholders are granted cumulative voting rights in the articles of incorporation, each shareholder is entitled to

Answer 13

multiply the number of votes she is entitled to cast by the number directors for whom she is entitled to vote and cast the resulting product for a single candidate or distribute the product among two or more candidates.

Question 14

When shareholders are granted cumulative voting rights in the articles of incorporation, each shareholder is entitled to

Answer 14

multiply the number of votes she is entitled to cast by the number directors for whom she is entitled to vote and cast the resulting product for a single candidate or distribute the product among two or more candidates.

Question 15

What determines the allocation of profits and losses among the members of the LLC.

Answer 15

LLC’s operating agreement

Question 16

Steps to establish a corporation

Answer 16

File articles of incorporation with state corporation commission and pay registration fee

Question 17

Articles of incorporation must include

Answer 17

Name of corp, number of authorized shares, and registered agent and office

Question 18

Steps to create a general partnership

Answer 18

No filing, created whenever two or more persons created a business for profit as co-owners

Question 19

Steps to create limited partnership

Answer 19

File certificate of limited partnership with state corporation commission and pay required fee

Question 20

Certificate of limited partnership must include

Answer 20

Name of limited partnership, registered agent and office, principal office of limited partnership, and name and address of general partner

Question 21

How can a general partnership be converted to a limited partnership

Answer 21

With approval of all partners and filing articles of limited partnership

Question 22

Liability of partners in general partnership

Answer 22

Unlimited person liability for debts of partnership. jointly and severally liable for debts of biz

Question 23

Liability of partners in limited partnershop

Answer 23

Limited partners have limited liability and are typically not liable unless they engage in control of business, third party reasonably believes they are a general partner and has no reason not to believe

Question 24

Liability of shareholders in corp

Answer 24

Generally not liable for debts of corporation unless pierce corp veil.

Question 25

Liability of members of LLC

Answer 25

Not personally liable for debts of corp unless pierce corp veil.

Question 26

How are profits and losses distributed in corp?

Answer 26

Shareholders are issued stock in accordance w their investment. Directors issue dividends in accordance w the stock they hold

Question 27

How are profits and losses distributed in LLC

Answer 27

According to the value of each member’s contribution

Question 28

How are profits and losses distributed in general partnership?

Answer 28

Partners share profits equally and share losses in same way share profits

Question 29

How are profits and losses distributed in Limited partnership?

Answer 29

According to the amount each LP contributes to partnership

Question 30

What happens when one person acts on behalf of a corporation not yet formed?

Answer 30

anyone who purports to act on behalf of a corporation knowing that the entity has not been incorporated is personally liable unless the other party also knew that there was no incorporation.

Question 31

What happens when officer/director/ person acts on behalf of a corp not yet formed but other officer does not know that corp has not formed?

Answer 31

Officer/director with no knowledge that corp didn’t form is not liable but party who knew is liable

Question 32

Does dissociation by death of a partner cause dissolution of partnership?

Answer 32

No, the dissociation of a partner by death from a partnership at will does not trigger dissolution and winding up of the partnership.

Question 33

What act must partnership do when a partner partnership continues to operate after partner dissociates?

Answer 33

the partnership must buy out the dissociated partner’s interest when the partnership continues after the partner’s dissociation.

Question 34

Buyout price of dissociated partner’s interest

Answer 34

The greater of the partnership’s (1) liquidation value or (2) going concern value, on the date of dissociation.

Question 35

Partners are personally liable for

Answer 35

Debts of partnership

Question 36

Partners are personally liable for

Answer 36

Debts of partnership

Question 37

Does partner’s dissociation terminate their liability for partnership obligation that occurred before dissassociaton?

Answer 37

No liable for debts of partnership incurred before dissociation

Question 38

Dissociated partner’s liability to third party

Answer 38

Dissociated partner is liable to third party who contracted w partnership within one year of partner’s dissociation and who reasonably believed dissociated partner was still a partner

Question 39

What must partnership do after dissociated partner’s interest is bought out?

Answer 39

Indemnify the dissociated partner for all partnership obligations

Question 40

What must partnership do after dissociated partner’s interest is bought out?

Answer 40

Indemnify the dissociated partner for all partnership obligations