Buseiness Law 2 Test 1 Answers
1. What is the major difference between stocks and bonds?
2. Name and describe 4 rights of the Corporate Board of Directors?
3. What is the “Business Judgment Rule” and when is it applicable?
4. Name 2 methods by which a Shareholder earns money from a corporation?
5. Name 2 duties owed by Corporate Officers. To whom are these duties owed? What must corporate Officers
do to fulfill each duty?
1. Act in good faith (honestly). 2.Exercise the care that an ordinarily prudent (care- ful) person would exercise in similar circumstances. 3. Do what she or he believes is in the best interests of the corporation
6. Name 10 Shareholder Rights?
Shareholders have numerous rights, which may include the following: 1. Voting rights. 2. Preemptiverights(dependingonthecorporatearticles). 3. The right to receive dividends (at the discretion of the directors). 4. The right to inspect the corporate records. 5. The right to transfer shares (this right may be restricted in close corporations). 6. The right to receive a share of corporate assets when the corporation is dissolved. 7. The right to sue on behalf of the corporation (bring a shareholder’s derivative suit) when the directors fail to do so.8. right to transfer shares. 9.Right to attend meetings, 10.right to a prospective, 11.right to attend meetings</P>
7. How are Board of Directors meetings documented?
8. How are acts of the Board of Directors documented?
9. Define Quorum?
A quorum is the minimum number of members of a body of officials or other group that must be present for business to be validly transacted.<
10. Define Proxy?
The signed appointment form or electronic transmission authorizing an agent to vote the shares i
11. Name 3 types of Board of Directors Committees.
executive, audit, finance, human resources
12. List 4 descriptives (whether role or responsibility) of a Corporate Officer
1.
Charcteristic
Sole Proprietorship
Partnership
Corporation
Limited Partnership
Limited Liability Company
Limited Liability Parnership
Method of Creation
Legal Position
Liability
Duration
Transferability of Interest
Management
Taxation
Organizatioal, License Fees and reports
Transaction in other states
Notes