Business and Personal Law Test Chapter 17
When two or more companies join together and form a new company.
Consolidation
Group of people that set the broad policies for the corporation and are responsible for seeing that the corporation acts within its power.
Corporate directors
Group of people who implement the policies of the directors by carrying out the day-to-day operations of the corporation.
Corporate officers
A corporation's financial inability to take advantage of a business opportunity provides an exception to the
Corporate opportunity doctrine
When an individual or corporation buys enough stock in another corporation to take over control of it.
Stock acquisition
A corporation that grants a franchise benefits by expanding its business without building new stores.
True
A person who owns stock in a corporation has the right to receive a stock certificate.
True
The government can terminate a corporate for failure to pay taxes or file annual reports.
True
The dissolution of a corporation can come about
by a unanimous vote of the shareholders
Corporations raise money
by selling stock
Name three shareholder rights
1. Receive a stock certificate 2. Receive dividends 3. Sue
Corporate officers are chosen by the __________.
Board of directors
Shareholders may bring a(n) __________ against a corporation if they believe they have been denied their rights as shareholders.
Direct suit
When a corporation makes a profit, they may decide to declare a(n) __________ to be distributed to the shareholders.
Dividend
The profits distributed to shareholders are called
Dividends
A corporation may not finance its business activities through bonds.
False
People who own preferred stock having voting rights in the corporation.
False
Unlike partners in a partnerships, directors of a corporation are not subject to the duty of care or the duty of loyalty.
False
Insider trading is legally considered a(n)
Felony crime
A license that a company grants to a business for the right to use its name and sell its products or services.
Franchise
Unlike corporate stock, corporate bonds earn
Interest
When two companies join together and one keeps its identity while the other loses it.
Merger
A shareholder's right to purchase stock before it is offered to the public is known as his or her __________.
Preemptive right
The right to vote on behalf of other shareholders is called a
Proxy vote
The __________ has developed rules regarding insider trading.
Securities and Exchange Commission