Unit 11 BUL

A shareholder who dissents from a merger is entitled to

Be paid the fair value of her stock

State statutes that govern the sale of investment securities within the state are known as ___________laws.

Blue sky

A director would incur personal liability if

Both a and b

If a plaintiff shareholder cannot show that a director's decision was made in violation of his duties of loyalty or care, the court will allow the decision to stand under the __________rule.

Business judgment

The combination of two corporations that results in the dissolution of both corporations and the emergence of a new corporation is a(n) _____________.

Consolidation

The suit that a shareholder would bring against the officers of a corporation to enjoin ultra vires acts or acts that impair corporate assets is a __________suit.

Derivative

Both shareholders and directors may vote by proxy.

False

ABC Corporation, which is incorporated in Delaware, has its corporate offices and main manufacturing plant in Ohio. ABC is classified as a _______________corporation in Ohio.

Foreign

The merger that creates the greatest number of antitrust issues is a _____________merger.

Horizontal

Preferred stock that is entitled to receive only the stated preferred dividend and no other is _______________ preferred stock.

Non-participating

When a corporation dissolves, holders of ___________ stock have priority in the distribution of corporation assets.

Preferred

The person who is designated to receive notices and service of process for a corporation is its

Registered agent

What happens when a court pierces the corporate veil?

Shareholders become personally liable for the debts of the corporation.

ABC Corporation has been dissolved. After paying all its creditors, ABC will make a cash distribution to its shareholders. Of the following, which shareholders will have priority in the distribution?

Shareholders who own preferred stock

Instead of giving shareholders a cash dividend, ABC Corporation gave each shareholder 2 shares of a new stock issue for each share of stock the shareholder already owned. This is an example of a _____________.

Stock dividend

A corporation ceases to exist as a legal entity when

The state issues a certificate of dissolution.

Which of the following statements about treasury stock is false?

Treasury stock can be resold only at par value.

Courts have great discretion in deciding whether to order the dissolution of a corporation when the shareholders or directors are deadlocked.

True

Shareholders have a right to vote on major changes to the corporation, such as mergers and dissolutions.

True

The Articles of Incorporation for ABC Corporation specifically forbids the corporation from making personal loans to its officers or directors. Despite this, the board approved a personal loan to the President of the corporation. This action by the board is ______________.

Ultra vires