Deck 33

Question 1

Cash tender offer

Answer 1

Offer to purchase a corporation’s stock directly from its shareholders at a specified price for a specified period of time

Question 2

What is a requirement for a corporation to elect S corp. status?

Answer 2

Less than 100 shareholders, one class of stock

Question 3

Cumulative voting

Answer 3

Each share is entitled to one vote for each director position that is being filled and the shareholders may cast the votes in any way. Helps minority shareholders gain representation on the board

Question 4

Pre-emptive rights

Answer 4

right to purchase new issuances of additional stock in order to maintain current proportional ownership

Question 5

Who has the right to corporate changes such as dissolution and amendments to the articles of incorporation?

Answer 5

Stockholders

Question 6

A director of a corporation is considered a:

Answer 6

Fiduciary

Question 7

Owners of an LLC are addressed as:

Answer 7

Members

Question 8

Owners of a corporation are addressed as:

Answer 8

shareholders

Question 9

What document must be filed to form an LLC?

Answer 9

Articles of Organization

Question 10

On dissolution of a general partnership the “order of distribution” would be as follow:

Answer 10

1) general partner loans; 2) partners capital accounts; and 3) general partners profits

Question 11

For a general partnership, when is a majority vote required?

Answer 11

Matters within the ordinary course of business

Question 12

For a general partnership, when is unanimous consent required?

Answer 12

Matters outside the ordinary course of business (except for dissolution, can be done by one partner)

Question 13

Rights in partnership property (PPE and inventory)

Answer 13

Not assignable and cannot attach

Question 14

Rights in partnership interest (Owners equity)

Answer 14

Interest is assignable and may attach

Question 15

Dissociation of a partnership

Answer 15

Change in partners (partners withdraws, dies, goes bankrupt)

Question 16

Dissolution of a partnership

Answer 16

Partnership is terminated and the business is wound up

Question 17

Allocation of profits and losses for an LP, LLC, and corp:

Answer 17

According to capital contributions (unlike GP)

Question 18

Allocation or profits and losses for an LLP and GP:

Answer 18

Allocated equally or according to profits

Question 19

Stock dividends

Answer 19

Retained earnings decreases, paid in capital increases, but total equity does not change

Question 20

What rights do shareholders have?

Answer 20

Elect directors and vote on fundamental changes

Question 21

Fundamental changes include (“DAMS”)

Answer 21

Dissolution, Amendment of articles of incorporation, Merger, and Sales of assets outside ordinary course of business