VA Corporations Essays Rule Statements

Question 1

share holders, officers, directors, and managers of a corporation are not liable for the corporation’s debts unless

Answer 1

they agree otherwise, the debts arise from the shareholder’s, officers, etc., own tort, or there are grounds to piece the corporate veil of limited liability

Question 2

the corporate veil will be pierced only

Answer 2

1) when the shareholders treat the corporation as their “alter ego” by ignoring corporate formalities, using corporate funds for personal debts
2) whent he corporation is undercapitalized, and
3) to prevent fraud

Question 3

termination of a corporation’s exitence by the SCC does/does not terminate corporate liabilities, and it does/does not create liabilities of the stockholders or directors for authorized business transaction

Answer 3

does not, does not

Question 4

a corporation can/cannot issue stock for promises to pay cash or provide services

Answer 4

can, used to not be able to but now can, but he remains liable on his obligation unitil the full consideration amount is paid and a creditor of an insolvent corp may be able to step into the corp’s shoes to enforce the promise

Question 5

the virginia code gives directors discretion to determine whether consideration other than money is

Answer 5

sufficient to pay for shares, and their good faith valuation of the consideration is conclusive

Question 6

when an agent enters into a contrqct on behalf of a principal, and the principal’s identity is disclosed

Answer 6

agent is not personally liable on teh contract

Question 7

a shareholder is eningtitel to notice of _____ of each annual and special _____

Answer 7

date, time, and place

shareholder’s meet

Question 8

a shareholder whose shares are pledged is entitled to vote such shares until teh share s have been

Answer 8

transferreed into the name of the pledgee

Question 9

a shareholder who has been one for at least 6 months or owns more than 5% of the shares has the right, upon ______ to sinpect and copy during regular business hours, a the prnicpal office, ______

Answer 9

written request at least 10 days in advance

bylaws, amendments, articles and all amendments to them currently in effect, director resolutions creating outstanding classes of shares, minutes of all shareholders’ meetings, all written communications to shareholders for the past three years, director and officer info, most recent annual report, and the acounting records of the corp

Question 10

a shareholder can object at the beginning of the meeting on the basis that

Answer 10

the matter presented is outside the scope of the notice given, or the meeting is not lawfully called or convened

Question 11

a corp can pledge all or part of its assets to

Answer 11

borrow money, not require shareholder assent unless articles of incpoproation say so

Question 12

shareholders can remove any or all of the directors

Answer 12

with or without cause, at a maeeting called expressly for that purpose, unles articles say can’t, notice must say why and given not less than 10 or more than 60 days prior to the meeting

Question 13

amount of shares sufficient to remove a director

Answer 13

majority of shares entitled to vote t an election, or if elected by class of shares, marojrity of that class

Question 14

if a director breaches duty and corp does nothing, shareholder can

Answer 14

demand board take axction, if still nothingn, derivative suit

Question 15

when the corporate veil is pieced, only ____ are held liable

Answer 15

shareholders who were active in managing the coproration are held liable

Question 16

contract claimants are ___ likely to pierce the corporate veil than tort claimatns bc

Answer 16

less, contracting party had opporutnity to investigate finanicla conditionf o th orporatino

Question 17

directors are/are not liable to the corporation and its creditors for authroizing an unlawful distribution

Answer 17

are, jointly and severally, for the amount that was unlawfully distributed, only those who assented to the distribution

Question 18

the virginia code forbids a distribution to shareholers if, after the distribution

Answer 18

remaining assets do not at least equal liabilitie

Question 19

good faith defense against liability for unlawful distribution

Answer 19

relied on fincancial statements represented to be correct by an officer responsible for such statements or an outside accountant

Question 20

a director against whom a claim is asserted is entitled to contribtuion from

Answer 20

the other directors who authorized the distribution, and may recover shareholders in proproiton to amounts receivedby them even if they didn’t know about its illegality

Question 21

statute of limitations for bringing statutory claims against a corporation

Answer 21

2 years

Question 22

in virginia, a transaction in which a director has a conflicting personal interest is not voidable if

Answer 22

1) the material facts of the transaction and the director’s interest are disclosed tot he board or the shareholders OR
2) the transaction is fair to the corporation

Question 23

a sale of all or substantially all of a corporation’s assets outside the regular course of the corporation’s business iis

Answer 23

a fundamental coprorate change

Question 24

approval of a fundamental corporate chage requires

Answer 24

the approval of a majroty of the directors and approval of more than 2/3rds of the shares entitled to be voted

Question 25

when a direcotr has a conflicting personal interest in a transaction, he may attend the meeting at which a vote is taken on the transaction , but

Answer 25

his vote is not counted

Question 26

to bring a derivative suit

Answer 26

the shareholder must have been a shareholder of the corp at the time of the alleged wrong, have had his shares devolve upon him by operation of law from one who was a sharehoder at the time of teh alleged wrong, or have become a shareholder before public disclosure of the alleged wrogn, fairly and adeuqatley reprsent the interests of the corporaton, make a demand at least 90 days beofre commencing the suit, unlesss the corp denied the demand ealrier or irreparable injury will result

Question 27

who can remove a director

Answer 27

only shareholders, not directors

Question 28

VA corps can make donations for the public welfore or for religious, charitable, scientiic, literary, or educational purposes, unless

Answer 28

the corp’s articles say no, mmust be reasonable in light of their assets

Question 29

usurping a corporate opportunity

Answer 29

a director may not divert to himself a business opportunity in which his corporation reasonably may be interested without first giving the corproation a chance to take the opportunity for itelsefl

Question 30

profit on the disposition of a cpatial asset is

Answer 30

taxable, if held for more than one year then long-term capital gains rates

Question 31

partnership torts

Answer 31

partnership liable for torious acts of partners committed within scope of partnership business, partners are personally liable for their own and other partners torts within scxope of business

Question 32

an attorney who represents a corporation may also represent a constituent of that corporation as long as

Answer 32

the representation does not violate conflicts of interests rules