Merger and Dissolution

Question 1

A ___ is a combination of 2 or more corporations such that only one corporation survives

Answer 1

merger

Question 2

The 4 - step process for a merger to take place is _____

A.N.A.F

Answer 2

1. directors of each corporations agree on a Plan to merge
2. Notice must be given to shareholders
3. the shareholder’s vote to approve that plan
4. the merger takes effect when the required docs are filed with the SOS

Question 3

A __ __ ___ arises when a transaction leads to the same result as a formal merger

Answer 3

De Facto Merger

Question 4

Generally, the purchaser of another corporation’s property (does/does not) become liable
for the seller’s obligations; the seller remains solely liable.

Answer 4

Does not

Question 5

Under, ___ ___, If shares have not yet been issued or business has not yet commenced, a majority of
the incorporators or initial directors may dissolve corporation by delivering articles of
dissolution to the state

Answer 5

voluntary dissolution

Question 6

Only after outstanding shares have been issues may a corporation ____ by following the fundamental change procedure

Answer 6

dissolve

Question 7

After dissolution, a corporation (is/is not) allowed to carry on any business except business appropriate to
winding up and liquidating its affairs

Answer 7

is not

Question 8

T/F
A claim can be asserted against a dissolved corporation, even if it does not arise
until after dissolution

Answer 8

True

Question 9

The state may bring an action to ____ ___ a corp. for reasons such as the failure to pay fees or penalties, failure to file an annual report, and failure to maintain a registered agent in the state

Answer 9

administratively dissolve

Question 10

The attorney general may seek___ _____ on the ground that the corporation fraudulently obtained its articles of incorporation or that the corporation is
exceeding or abusing its authority

Answer 10

judicial dissolution

Question 11

T/F

Shareholder can seek judicial dissolution

Answer 11

True

2. Shareholders may seek judicial dissolution on any of the following grounds:
   a. The directors are deadlocked in the management of corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened, or corporate affairs cannot be conducted to the advantage of
   the shareholders because of the deadlock;
   b. The directors have acted or will act in a manner that is illegal, oppressive, or
   fraudulent;
   c. The shareholders are deadlocked in voting power and have failed to elect one
   or more directors for a period that includes at least two consecutive annual
   meeting dates; or
   d. Corporate assets are being wasted, misapplied, or diverted for noncorporate
   purposes

Question 12

T/F

Creditor cannot seek judicial dissolution

Answer 12

False,
Creditors may seek judicial dissolution if:
a. The corporation has admitted in writing that the creditor’s claim is due and
owing and the corporation is insolvent or
b. The creditor’s claim has been reduced to judgment, execution of the judgment
has been returned unsatisfied, and the corporation is insolvent

Question 13

A ___ suit is to enforce the right of a shareholder

Answer 13

Direct

Question 14

A ___ suit is to enforce a right belonging to a corporation

Answer 14

derivative

Question 15

A plaintiff bringing a derivative suit must have owned shares __ __ of wrong, must maintain ___ throughout the suit, and demand the ___ bring suit

Answer 15

at time

ownershio

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