90%(49)44 out of 49 people found this document helpful
This preview shows page 13 - 16 out of 52 pages.
70. Robert Hill Corp. is incorporated in the state of Delaware. If they transact business in Iowa, in Iowa Robert Hill would be characterized as a/an: A. domestic corporation.B. foreign corporation.C. alien corporation.D. native corporation.15-13
Chapter 15 - CorporationsEssay Questions71. Burt has come across an excellent recipe for a new beer and he and twenty college friends decide to go into business. They form a corporation named New Brew Inc., issuing stock onlyto the twenty one of them and not selling any stock outside of the group. The beer is a huge success and they soon have the need to expand. They decide to sell stock to members of the public to raise capital. Aside from stock disclosure requirements, what must they do and how will it affect their corporate status? 72. What is the difference between a derivative action and a direct action regarding shareholder lawsuits and what are the typical grounds for these suits? 73. What does it mean when it is said that corporations are double taxed? 15-14
Chapter 15 - Corporations74. Suds Corp. has just suffered a huge loss of revenue for three quarters and the shareholders are furious. Much of the loss can be attributed to a board decision to change the focus of the company from traditional lager beer to a lighter and smoother brew. Unfortunately the new recipe alienated current customers and failed to bring in new customers. Although Suds has announced that they will return to their original product, the shareholders are claiming a violation of the board's fiduciary duty of care and they are suing the directors personally for their significant losses. What must the shareholders prove to be successful? What defense is available to the directors and what must they prove to prevail? 75. Power Play, Inc. has decided to raise capital to grow and strengthen the company to make it attractive to competitors who might wish to purchase the business. A board member has suggested that they seek funding through a venture capital firm. How does a venture capital firm operate and is there a disadvantage to using venture capital? 76. Robin is the treasurer of Big Bottle Brewery, Inc. Big Bottle is a small local brewery that has recently started and has minimal assets. At 4:30 pm one day, she realizes that she hasn't made an important bank deposit and only has one half hour to get to the bank. She takes a corporate car and is speeding to the bank when she hits Gretchen, a pedestrian legally in a cross walk. Gretchen is seriously injured and the car which then careened into a pole is totaled. Gretchen sues both Big Bottle and Robin. The bank which financed the car has also sued Big Bottle and Robin because Big Bottle stopped making the loan installment payments after the accident and is in default. Discuss Big Bottle's and Robin's liability, if any.