Directors/Officers/Shareholders

Question 1

The ____ has general responsibility for the management of the business
and the affairs of the corporation.

Answer 1

BOD

Question 2

T/F

A director must be a resident of the state where the corp. is

Answer 2

False

Question 3

The directors are elected at the first annual meeting of the ____

Answer 3

shareholders

Question 4

T/F

A director may resign at any time without written notice

Answer 4

False, must deliver written notice

Question 5

T/F

Directors may only be removed with cause

Answer 5

False, Directors may be removed with or without cause

Question 6

If a quorum is present, resolutions being voted on will be deemed approved if approved by a
____ of directors present

Answer 6

majority

Question 7

T/F
The board of directors is not expected to participate in the daily business affairs of the
corporation

Answer 7

True

Question 8

Who does the BOD delegate management functions for DAILY business affairs to?

Answer 8

Officers

Question 9

T/F

The board remains responsible for supervision of the officers despite the delegation of duty

Answer 9

True

Question 10

Under the duty of care, what are the director’s duties?

Answer 10

1) a duty to act In good faith
2) a duty to act with the care that an ordinarily prudent person in a like position would
exercise under similar circumstances; and
3) a duty to act in a manner the directors reasonably believe to be in the best interests of the
corporation.

Question 11

The directors also have a duty to disclose ____corporate information to other
members of the board

Answer 11

material

Question 12

Under the duty of loyalty, what are the director’s duties?

Answer 12

A director owes a duty of loyalty to her corporation and will not be permitted to profit
at the expense of the corporation.

Question 13

T/F

The board may set director compensation

Answer 13

True,
Unless the articles or bylaws
provide otherwise, the board may set director compensation

Question 14

Officer’s duties are determind by the ___

Answer 14

Bylaws

Question 15

The officers are agents of the corporation and receive their power to manage from
the _____

Answer 15

directors

Question 16

An officer may act with ___ or ___ authority

Answer 16

Actual or apparent

Question 17

An officer must carry out her duties in ____

Answer 17

in good faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner she reasonably believes to be in
the best interests of the corporation.

Question 18

T/F

An officer does not have the power to resign at any time

Answer 18

False

Question 19

T/F

An officer can only be removed with cause

Answer 19

False

Question 20

____ are the ownrs. of a corporation

Answer 20

Shareholders

Question 21

T/F

Shareholders are personally liable for the obligation of the corporations

Answer 21

False

Question 22

T/F

Directors are personally liable for the obligation of the corporations

Answer 22

False

Question 23

T/F

Officers are personally liable for the obligation of the corporations

Answer 23

False

Question 24

T/F

At common law, shareholders have a right to directly control the day-to-day management of the corp.

Answer 24

False.
However, the MBCA also
allows a departure from the general rule: Shareholders may enter into agreements
concerning management of the corporation.

Question 25

Even absent a ______ vesting direct control of the corporation in
shareholders, shareholders have indirect control over their corporation through

Answer 25

shareholder agreement

Question 26

Shareholders have the right to elect ____

Answer 26

directors

Question 27

T/F

Shareholders can only remove directors with cause

Answer 27

False

Question 28

____ have the power to adopt,

amend, or repeal bylaws.

Answer 28

Shareholders

Question 29

Changes to the fundamental structure of a corporation cannot be made without
the approval of the _____

Answer 29

shareholders

Question 30

T/F
Shareholder approval is not required in cases of
merger, sale of corporate assets outside the ordinary course of business, dissolution, and for other extraordinary corporate matters.

Answer 30

False

Question 31

A majority

of the votes entitled to be cast on the matter by a particular voting group will constitute a _____

Answer 31

Quorm

Question 32

Officers are appointed by the ____

Answer 32

board of directors

Question 33

Officers may be removed by the ____

Answer 33

board of directors

Question 34

Officers have ____ ____ given by the board, articles, and bylaws

Answer 34

actual authority

Question 35

Officers have ___ to do whatever someone in their position would
normally have authority to do

Answer 35

apparent authority

Question 36

a director has a duty to prevent corporate ____

Answer 36

waste