Reference no: EM1339148

Explain Corporate Law Questions

I would like to know if these answers are correct:

1. Delacroix discovers a boat adrift, and he retrieves and anchors it. The boat has a number on its side and other evidence pointing to its owner, Elvira. This is
a. an involuntary bailment.
b. a voluntary bailment.
c. an express bailment.
d. Not a bailment.
Answer: I think that the answer is A. is an involuntary bailment because someone ends up with the goods without ever intending to do so.

2. Jack and Jill, who are brother and sister, own 10,000 shares of stock in My-T Gro Corporation . Because of the manner in which title is set up, on the death of either owner, that owner's interest in the stock will pass by operation of law to the surviving owner who will own all of the shares, outright. What type of ownership interest is this?
a. a tenancy in common.
b. a life estate.
c. a joint tenancy.
d. a tenancy by the entireties.
Answer: I think that the answer is C, a joint tenancy because if any one of them dies, the remainder of the stock is transferred to the survivor.

3. XYZ Corporation (the corporation) has been profitably operating a retail sales business for several years. Jamal is the sole shareholder, officer, and employee of the corporation. On October 6, 2012 the corporation entered into a five-lease with Kelvin and moved its business into the new premises. On November 10, 2012, The Last Rational Bank made a $5,000 loan to the corporation. On February 1, 2013, a patron slipped and fell in the premises, seriously injuring her back. The February rent and loan payments are in default. For which will Jamal be subject to personal liability?
a. The loan and rent only.
b. Damages for the slip and fall only.
c. The loan, the rent, and damages for the slip and fall.
d. None of the above.
Answer: I think that the answer is C, the loan, the rent, and damages for the slip and fall

4. Mary Contrary owns shares of stock of Modest Corp. She receives notice that that Mammoth Corp. and Modest Corp. have agreed to merge with Mammoth being the surviving corporation. Mary had voted against the merger and does not wish to become a Mammoth shareholder. In these circumstances Mary should
a. exercise her appraisal rights.
b. sell her Modest stock in a transaction supervised by the U.S. Justice Department.
c. sue to enjoin the merger.
d. seek to impeach Modest's board members.
Answer: I think is A, exercise her appraisal rights.

5. Tom invented what he believes is a "can't fail" method of keeping buttered popcorn warm in overcooled movie theaters. If only he had the money to start manufacturing the product. Tom would be best advised to
a. approach family and friends for loans or to purchase equity interests.
b. go to his local bank for a loan to be secured by pledging his invention as collateral security.
c. approach venture capitalists and solicit their equity investments.
d. approach private equity firms and solicit their equity investments.
Answer: I think that the answer is C, approach venture capitalists and solicit their equity investments

6.Mary Contrary, a shareholder of Modest Corp. along with likeminded shareholders ,do what's necessary to bring a shareholders derivative suit against the members of Modest's board of directors. The suit alleges that the board members negligently made substantial and ultimately disastrous investments of Modest's cash on hand. The board members are likely to defend themselves claiming
a. they weren't feeling very well at the time.
b. that Mr. Madoff seemed to be such a pleasant and competent fellow.
c. business judgment rule protection.
d.it was a matter within the exclusive control of Modest's investment committee.
Answer: I think is C, business judgment rule protection.

7. Billy Bob purchased a franchise from Wide-Awake Cola Corp. According to the terms of the franchise agreement Wide-Awake would manufacture its product which would be purchased by Billy Bob for sale to the public in his exclusive territory. The law governing the relationship between Billy Bob and Wide-Awake is
a. the general contract law of Billy Bob's state.
b. the general contract law of Wide-Awakes state of incorporation.
c. federal contract law.
d. Article 2 of the Uniform Commercial Code.
Answer: I think the answer is D, Article 2 of the Uniform Commercial Code

8. Mammoth Corp. decides to buy all of the assets of Modest Corp.
a. approval by the majority of shareholders of both corporations will be necessary to complete the transaction.
b. approval by the majority of shareholders of Modest Corp. will be necessary to complete the transaction.
c. Mammoth must assume all the liabilities of Modest when it purchases all of the assets of Modest.
dither U.S. Justice Department's approval is always required to avoid anti-trust claims.
Answer: I think the answer is A, approval by the majority of shareholders of both corporations will be necessary to complete the transaction.

9. Billy Bob is a director of Mammoth Corp. He missed the last board meeting. At the meeting the board voted to open corporate bank accounts in Switzerland and the Caymans. Billy Bob strongly disapproves. He would be best advised to
a.telephone each director who voted yes and express his disapproval.
b.contact the IRS and report Mammoth for suspected income tax evasion.
c. resign from the board.
d.immediately write the secretary of the board directing the secretary to record his dissent in the minutes of the meeting he missed.
Answer: I would say that the answer is C, he should resign from the board

10.Jack purchases a $100,000 face amount whole life policy on his life. He names his wife as beneficiary. The next year Jack sells his policy to his very good friend, Jill. Jill changes the policy beneficiary designation to herself. When Jack dies
a. Jill will not be able to collect the $100,000 because she did not have an insurable interest in Jack's life.
b. Jack's wife will collect the $100,000 because the beneficiary designation change was ineffective.,
c. Jill can collect the $100,000 policy proceeds.
d. Jack's wife can successfully sue the life insurance company to collect the $100,000 already paid to Jill.
Answer: I would say that the answer is A, Jill will not be able to collect the $100,000 because she did not have an insurable interest in Jack's life.

11. The State of Grace requires cumulative voting. Modest Corp. has 20,000 shares outstanding. Minority shareholders hold 6,000 shares and the majority hold 14,000 shares. Four shareholders have been nominated for election to three seats on the board of directors: Larry, Moe, Shemp and Curley. Can Curley be elected to one of the three seats by the minority?
a. yes.
b. no.
c. yes, provided the minority gets one vote from the majority.
d. yes, provided the minority gets four votes from the majority.
Answer: I would say that the answer is D, yes, provided the minority gets four votes from the majority

12. The Internal Revenue Service will automatically income tax a 2 or more member limited liability company as
a. a corporation.
b.a C corporation.
c. an S corporation.
d. a partnership.
Answer: I would say that the answer is D, a partnership.

13. syndicate is most closely related to
a. a joint stock company.
b. a business trust.
c. a cooperative.
d . a venture capital firm.
Answer: I would say that a syndicate is more like a joint stock company, A