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Exam 34: Corporate Directors, Officers, and Shareholders

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Question 21

True/False

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When it comes to managing a corporation, the corporation relies on its board of directors and officers.

A) True
B) False

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Question 22

Multiple Choice

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When a vacancy occurs on a corporate board, how the position will be filled is most likely set forth in

A) the corporation's articles or bylaws.
B) shareholder proxies.
C) the business judgment rule.
D) the board's recorded minutes.

E) All of the above
F) C) and D)

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Question 23

Multiple Choice

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Randy is a director of STEM Inc. As a director, with respect to the corporation, Randy is expected to use

When directors vote on issues affecting the corporation, ordinary matters generally require

When directors do not act in the best interests of their corporations, the shareholders may sue them on the company's behalf.

Drones Inc. has three directors, a president, two vice presidents, a secretary, and a treasurer. Ethel is a Drone director. In most states, Ethel can also hold a Drone corporate office

To make informed decisions and supervise corporate officers and employees, the directors need an unrestricted right to inspect corporate books and records.

Ben is a director of ChemCo Inc. Because of this position, he becomes involved in litigation. With respect to the costs, fees, and damages involved, he has a right to

Holly is an officer of Indelible Inc. The board removes Holly in violation of an employment contract. Indelible may be liable for breach of

A breach of fiduciary duties by those who own a close corporation normally constitutes oppressive conduct.

The rights of the director of a corporation include a right to

Belle is a director on the board of Construction Corporation. The board delegates certain tasks to Don, the corporate president, and other officers. Belle fails to reasonably supervise the work. She is most likely liable for

Because of their positions within the corporation, directors cannot be held personally liable for violations of statutes enacted to protect the environment.

The board of directors hires the corporation's officers, and normally can remove them at anytime with or without cause.

In most states, an individual can hold only one corporate office.

A corporate director is not liable to the corporation or its shareholders for an honest mistake of judgment.

Gil is an officer for HVAC Corporation. Due to a bad choice of supplier on Gil's part, HVAC's costs increase. Gil is most likely liable for breach of

Guy is Hot Java Company's majority shareholder. Guy decides to sell his Hot Java stock. The sale will be an effective transfer of the control of the company. Does Guy owe a duty to Hot Java or its minority shareholders in this situation?

Riley is elected as a director to the board of Salty Snacks, Inc. He will most likely serve for a term of one

Risk Insurance Inc. has a board of five directors. Risk's bylaws do not state any quorum requirements. As in most states, a quorum for Risk's board meetings is