Reg Sec 15

Question 1

Revised Model Business Corporations Act

Undercapaitalized(Watered stock)

Answer 1

authorizes indemnity officers for liability as a result from suit by shareholders.

Closely-held corporation is considered undercapitalized if issued for less than par value and shareholders may be liable for difference.

Question 2

Merging Sub with Parent

Revised Uniform Partnership Act

Answer 2

The sub dissenting stockholders must be given an appraisal remedy.

a partner’s withdrawal, death or bankruptcy does not automatically cause dissolution of the partnership.

Question 3

Voting Trust

Admitting or Retiring a partner

Answer 3

is a device which on or more shareholders agree to issue all or part of their stock to a trustee who holds legal title to the stock.

The new partner will be liable for contracts and torts that arise after the date of admission and not personally liable for actions taken before. When partner retire the party must give Actual notice (contact third party) or Constructive notice (public notice).

Question 4

Types of authority
Limited partner
Ownership freely transferable

Answer 4

Actual-partnership intends to give the partner power to contract. (Expressed & Implied)
Apparent-partnership creates impression that partner has authority.
Unauthorized action-not liable unless ratify.

Limited partner must have at least one general partner and one limited partner. and in the one partner commits a negligent act all the partners other than the supervisor of, and the negligent partner can avoid personal liability.

Corporations ownership is freely transferable.

Question 5

Dividends declared
Pierce of Corporate veil
Preferred stock cumulative

Answer 5

When dividends are declared, they become a legal obligation of the corporation and must be paid upon liquidation.

Shareholders are personally liable if the shareholders have commingled their perusal funds with those of the corporation.

cumulative preferred stock that are not paid in a given year is carry over to future years.

Question 6

Certificate of existence

General or limited

Answer 6

is required in maintaining an office in another state to conduct intrastate business.

General or limited is permitted to have other forms of relationships with the partnership, including that of creditor, whether unsecured or secured.