Mann_BLRB 9_TB_Ch36

Business Law and the Regulation of Business

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Chapter 36—Management Structure of Corporations TRUE/FALSE 1. As the shareholders' elected representatives, the board of directors are delegated the power to direct the business of the corporation. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. The 1969 amendments to the MBCA included liberalizing provisions for closely held corporations. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. In most states and under the Model Act, cumulative voting is permissive and not mandatory. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. Notice of a shareholder's meeting may be waived in writing. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. A quorum will consist of one-half of shares entitled to vote if there are no provisions for any other number in the articles of incorporation. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 6. Although there has been consideration of a statutory close corporation supplement to the Model and Revised Acts, there has, to date, been nothing officially promulgated. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. Directors are elected at the annual meeting of shareholders. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. One difference between large, publicly held corporations and closely held corporations is that more of the shares of closely held corporations are held by institutional investors. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. The Statutory Close Corporation Supplement has relaxed most of the non-essential corporate formalit- ies. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. Only the board of directors may approve fundamental changes in the corporation. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 11. Unissued shares and treasury stock must be counted to see if a quorum exists. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic
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12. A proxy is effective until the shareholder revokes it. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. A proxy is revocable to the same extent as an agency. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. A voting trust permits a concentration of corporate control in one or more persons. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 15. Voting trusts generally are effective for one year. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 16. Under the Revised Act, a closely held corporation may use a shareholder agreement in place of bylaws. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 17. The members of the board of directors are essentially trustees of the corporation. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 18. Under the RMBCA and an increasing number of other statutes, by a majority vote, shareholders may remove the entire board of directors without cause. ANS: T
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Mann_BLRB 9_TB_Ch36 - Chapter 36-Management Structure of...

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