Exam Questions: Corporate Governance and Partnerships, Exams of Business and Labour Law

Download Exam Questions: Corporate Governance and Partnerships and more Exams Business and Labour Law in PDF only on Docsity! 0LD , ExAt4S K trttft 'l you have 100 minutes for the exam. 50 points. Fqt the answers to ALL parts in your examination book and indicate whetlTer you are taking Tcst A or B on the iront of your exam book. Use (a) or (b) for true/false questions. Failure to follow directions is a wrong answer. part l. Put the bes!/correct answer in your examination book. 30 points (1.5 points each) o .- 1. The regulbiion 6f relations between a corporation and its directors, officers and shareholders (corporate governance) is usually exercised by: a. the common law ol corporation_s ol the state where the corporation has its principal place of business. b. the Model Business Corporation Act (MBCA) fB tn" law ol the state where the corporation is incorporated Y i"detal securities law 'e. the 14th Amendment of the U.S. Constitution, Due Process Clause 2. ln determining whether propefty used by a partnership is paftnership propefiy or a padner's personal property, a ccurt rvi!l ccnsiCei' several indicia (indications) of orvneiship, i4cluding the following: t. Wnetner title is held in the name of the partnership. ll. Who pays for repair and maintenance of the property. lll. An agreemenl between the partners concerning who owns the property. Of these three indicia: a. t is the most important indication of ownership, ll is second, and lll is third. b. ll is the most important indication of ownership, I is second, and lll is third. c. I is the most important indication of ownership, lll is second, and ll is third. (?) 1t is the most impofiant indication of ownership, I is second, and ll is third. g. Susan is a paftner of Andrusian Consulting, a consulting partnership. Susan agrees with Mimms Company that Andrusian will provide management consulting services for $75,O00 to Mimms if Mimms agrees to pay Susan $5,000 personally. What fiduciary duty will Susan breach if Mimms PaYS her $5,000? 4 duty to act with care for the partnership's interests (9/Outy not to Profit secretlY c..dutY to serve d. duty to indemnifY the Partners 4. A principaf can restrict or eliminate apparent authority that an agent would othenrise have, and cag$ so through express statements to her agent. a. true( b.IalseV t, BMGT 381 Fall 2001 (McClenahan)' Mid-Exam Test A n S. Under the MBCA (Model Business Corporation Act), preferred shareholders have the righi to vote on all of the lollowing matters except: fE) npproval ol common share optiorl plans for executive officers. Y n"bucing the dividend preference of'the preferred shareholders. c. Creation ol newly,authorized pref erred shares. d. A voluntary dissolution of the corporation. 6. tn order to terminate an ex-agent's authority to third parties who have previously dealt with the agent, a PrinciPal must: a. provide constructive notice though a filing with the Secretary of State of the jurisdiction of lhe agent's principal place of business. fO\ ptoiiOe actual notice to the third parlies directly, personally or in writing. Y provide actual notice to the parties by publication in a newspaper with local circulation or a trade publication. d. provide constructive notice to the parties by publication in a newspaper with local circulation or a trade publication. 7. Termination,of an agency relationship by act of the parties also terminates the agbnt's: . a, -exples-s -authqfity, - b. implied authoritY J\aPparent SuthoritY GLI'tal and (b) e. (a), (b) and (c) g. ,'piercing the corporate veil" is a legal doctrine used to subject shareholders Ol a corporation to personal liability when they have dominated the corporation and have used thai domination fo;4n improper purpose such as transferring corporate assets lor less than lair market value.(7'true b. false 9. Under the MBCA{Modef Business Corporation Act) a corporation's existence begins: a. Only alter the promolers substantially comply with each of the mandatory conditions precedent to incorporation and hold an organizational meeting. (6) Ontv after the articles of incorporation are liled with the secretary of state. X lVn6n the secretary of state returns to the corporation a copy of the arlicles stamped "Filed." d. Only after (b) and the corporation adopts bylaws dealing with corporate governance. 10. For.qprincipal to be directly liable for her agent's torts, the agent must be an emptoyee. a. true ( bjfalse\-/ 11. \ffhich of the following is not within the implied authority of a padner winding up the business of an accounting partnership? a. Sell the partnership's building that is its principal place of business. b. Dispose ol the pailnership's excess supplies' ( c}ttta*e a contract to audit the financial records of a new client. Yl Uire a staff accountant to assist in the completion of an audit of an existing client. 2 Fart ll. ln well developed essay/paragraph answer/discuss one of the questions. ldentify which question you are answering. 10 points 1 . Lopp, lnc. is a close corporation with four majority shareholders, each of whom owns 1000 shares and is a director ol the corporation, and 10 minority shareholders, each of whom owns 100 shar:e5-_and is merely an investor. The shareholders have elected Sub-Chapter S Corphdii-5ti'515tu*i:I![gl.share transfer restrictions woufd you recommend that the corporation/sharehoiciifSt iimploy,eAd.y,lU.L$_Q9lgg-ejh,4*y*d$#eek"to:esuisp#erly transitions of ownership; avoid conflictS; and-maintain the balance of power in the corporation and its Sub-Chapter S Corporations status. Discuss fully. ng li5ed their 'automobiles to call on clients and their personal computers to provide accounting services, financial analysis and memos advising clients. fn f gy-ql!.ily*gqg.-{an_otfice and borl$l$Uii[ls1-1+"Sh.e.#A#-e::rsr*.FUta635$515196e=i€r..ifitttr.gF-:fil0{sUvet.wnfflr+'-FRtltilns a recdssion began and their clients terminated their consulting-contracts.-Tom and Paula eventually defaulted on their lease and loan. Tom has no personal assets, but Paula has substantial weatth from an inheritance. Will thq bank and the landlord be able to hold Paula liable lor att of rhe defaulted payments? whyil$ifaTFffiiffiresff"eiis#frsffii have if she is liable-? part lll. In well developed short paragraph/essay answer/discuss oneof thefollowingtwo the other partners (including Shawnequa) individually. Discuss potential liability of Bean, Bean and Count0r, the negligent partner and other partners like Shawnequa. on behalf of an undisclosed q f)o awnequa is a partner in Bean, Bean and counif.ttr#?ilted tiabitiry padnership.( OAe of Shawnequa's paflners negligently audits a client, with the result that a bank lhat -relied on the client's audited financial statements sulfers damacben the client fails to repay the loan. The bank sues Bean, Bean and Counter LLP, thElElgent padner, and all all ' Frcrn 2GG3-2SS5 Part Il. 4 polnis. ln vuell-developeo shorl essay of one or more paragraphs answer/diicuss one of the following two questions. ldeniify which question you are ?nswering. (lf you feel ii is necessary, you ffi?y 1'p2L" reasonable factual assumptions to answer the question. lf you do this, specify your assumptions, but don4?5ume a\,vay the problem/q uesticn.) ^) / t. hate Everett did business as Dale Everett Company (DEC). He also( ,/ tor*ed a retail business known as "The Clubhouse," vrhich had no legal\-/ 'status asicle front its registration as the trade name for DEC. Everett contracted with James Smith for $8500 for advertising tin'le. Everett si6'fr6d-me contract with Smith as follorvs: "THE CLUBHOUSE, Client, by Oilffierett."-Smith-later sent billing statements for the ads to "Ths- '. - . Clubhous6, Inc." Everett never paid Smith the $8500, and Smith sued Everett personally. ls Everett personally liable on the contract with Smith? fuv orwhy not? \ / Z.',bo6O Ole Boys Fireworks (GOB) manufactures and sells fireworks at retail l/1n Alabama and Tennessee to residents of those states. Also, between June I and July 3 of each year it sets up a retail flreworks stand in Franklin, Kentucky from which it does a booming business (pun intended) with Kentucky residents. GOB is registered/has qualified to do business in Alabama and Tennessee, only. On July 1, a truck owned by Flat Gap Trucking negligently crashes into the GOB stand in Franklin and causes ' severe o'amage. On that same day Wee \Mllie Wee (\AAMAI) is severely injured when fireworks he purchased from the Franklin stand blow up in his face. GOB wants to sue Flat Gap Trucking. \ry\M/f wants to sue GOB. Who will be able to bring what lawsuits? Explain fully, including why GOB and WEE may or may not be ableto bring their actions. Will eOg be subject to any other sanctions/penalties? Ast,r^* ir;ffi' tr'o* Go I tQ vnctt1n&d,;1fu)ountt" | .. t, )'JJW La+5 7,vlt1 ,,Li.l,Ll t,', rl<cf- ^,f Gcg /- ,J,A (r /i-