Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BLAW 301 > Exam 3 > Flashcards

Exam 3 Flashcards

1
Q

General Formalities to Form Corporation

A

1) Filing papers with secretary of state
2) Secretary issues certificate of incorporation signifying formal beginning of legal existence
3) Bylaws must be adopted, directors and officers elected, shares of stock issued
4) Regular meetings of directors and shareholders must occur

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Who holds the investor role?

A

Shareholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What rights do shareholders have in their investor role?

A
  • vote for BOD and major changes in the organizational structure
  • receive dividends if directors choose to authorize such
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Can shareholders occupy other roles in the corporation

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Who has power or control of the organization

A

Board of Directors as a group

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How is Board of Directors selected

A

by a vote of the shareholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who do the Board of Directors vote for

A

Officers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Who controls the day-to-day management of the company

A

Corporate officers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What rights do the board of directors hold

A

set policy

ultimate decision makers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What rights do the corporate officers hold

A

carry out policy decisions and directives of the board

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What rights do the corporate officers hold

A

carry out policy decisions and directives of the board

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Who are the top officers provided by corporation statute

A

president, secretary, treasurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Return on Investment Comes From

A

market appreciation

dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the goal of return on investment

A

buy low, sell high

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is market appreciation

A

profit is “returned” via the share price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Limited Liability

A

only lose amount invested in corporation

17
Q

Unsecured Debt

A

contract between debtor and creditor in which creditor lends money to debtor, and debtor promises to pay repay it

***no collateral

18
Q

Secured Debt

A
  • **creditor has hedge against risk of default
  • **debtors continued ownership of specific property subject to full repayment of loan
  • ***collateral
19
Q

If using personal property as collateral what do you use to transfer collateral right

A

Article 9 of Uniform Commercial Code

20
Q

If using real property as collateral what do you use to transfer collateral right

A

mortgage

21
Q

Secured Creditor

A

creditor with the benefit of a security interest over some or all of the assets of the debtor

22
Q

Mortgagee

A

entity that lends money to the mortgagor for the purpose of purchasing a piece of real property

23
Q

Debtor

A

person or institution that owes a sum of money

24
Q

mortgagor

A

the borrower in a mortgage, typically a homeowner

25
Q

Sell Property

A
  • property it owns

- bonds or shares of stock

26
Q

Sell Property

A
  • property it owns

- bonds or shares of stock

27
Q

1933 Securities Regulation Act

A

goals of information disclosure and reinforcing the perception of fairness within the market

28
Q

Elements of Fraud

A
  1. must be material information missing or misstated
  2. parties that face liability risk because of missing or misstated material information include anyone who was involved in preparing the statement (due diligence defense for everyone but the issuer of securities, they must prove they were careful when preparing and then they are free of liability)
29
Q

Interests companies need to consider before entering contract

A
  • attractiveness of being obligated to pay back any capital it receives (borrows)
  • whether it is worth while to exchange some kind of property for another
  • effect of having additional shareholders on the operation of corporate structure
  • what is the legal risk when using any of the capital formation methods
  • what is the cost
30
Q

Implications of Raising Capital by borrowing from a bank

A
  • you have to pay back money
  • may need to use property as collateral
  • legal risk (default=lost property)
  • cost of creating contract and structuring the transfer of collateral right
31
Q

Implications of Raising Capital by selling bonds

A
  • pay back money
  • bond may be “secured”
  • must be structured and comply with securities law
  • legal risk
  • cost of creating the bond and cost of complying with securities law
32
Q

Implications of Raising Capital by selling stock

A
  • additional shareholders cause current shareholders power to be diluted
  • transferring new share of stock to each buyer
  • legal risk
  • cost of compliance

BLAW 301 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions