Business Law II: Quiz 6 (CH33,34,36)

A shareholder in a professional corporation generally cannot be held liable for malpractice by other professionals at the firm.

False

The primary document needed to incorporate a business is the bylaws—the primary source of guidelines for the firm's management and operation.

False

The purpose of the Securities Act of 1933 is to regulate a security's investment price.

False

Under the business judgment rule, directors cannot be held liable for the negligence or mismanagement of corporate personnel.

False

Molly is a director and Ned is an officer of Online Education Inc. Liability for the torts of employees under their supervision may extend to

Molly & Ned

Because of their positions within the corporation, directors must make full disclosure of any conflicts of interest with respect to corporate contracts.

True

Household Products Corporation wants to make an offering of securities to the public. The offering is not exempt from registration under the Securities Act of 1933. Before the firm sells its securities, it must provide investors with

a prospectus

Carmen and Diego are shareholders of Espresso Inc. Carmen's written authorization to Diego to vote her shares at a shareholders' meeting is

a proxy

A corporate officer

a. all of the choices. b. makes and announces corporate financial decisions. c. authorizes major corporate policy decisions. d. manages day-to-day operations of the corporation.

Liability for negligence in the performance of corporate duties may extend to

directors and officers