Limited Liability Partnerships

Question 1

Shareholders are:

1. The managers of a corporation
2. The directors of a corporation
3. The owners of a corporation
4. The employees of a corporation
5. The creators of a corporation

Answer 1

3. The owners of a corporation

Question 2

The articles of incorporation:

1. Must be filed with the secretary of state
2. Trump corporate statutes
3. Trump corporate bylaws
4. All of the above
5. 1 and 3 only

Answer 2

5. 1 and 3 only

Question 3

Which of the following is a typical characteristic of a close corporation?

1. It is easy to sell shares in it
2. It is owned by people without a relationship to it
3. Its shareholders are not involved in management
4. There is no ready market for its securities
5. It is “closed” and no additional securities can be issued

Answer 3

4. There is no ready market for its securities

Question 4

Which of the following are by definition employees of a corporation?

1. officers
2. shareholders
3. directors
4. incorporators
5. stakeholders

Answer 4

1. officers

Question 5

The equity interest which has the “last in line” residual rights to the assets of a corporation is a:

Answer 5

common share

Question 6

A director’s duty to put the corporation’s interests ahead of her own is a _____________; a director’s duty to be attentive and prudent in making decisions on behalf of a corporation is a _____________.

Answer 6

duty of loyalty; duty of care

Question 7

Joe’s Motorcycle Repairs, Inc., is incorporated in Kansas, has its headquarters in Oklahoma City, and all of its customers and shareholders are in Oklahoma. Joe’s Motorcycle Repairs, Inc., is making a LOT of money, but has not paid a dividend to the common shareholders in ten years. The common shareholders file suit in Oklahoma state court. What law will govern the substance of the dispute?

Answer 7

Kansas corporate law

Question 8

Using the business judgement rule, courts presume that director decisions are:

Answer 8

disinterested

Question 9

ABC Corporation files articles of incorporation authorizing 200 common shares. ABC sells 150 common shares to shareholders. Later, ABC buys back 75 of those common shares from shareholders. ABC has engaged in no other activity relating to its shares. At this point, ABC has:

Answer 9

200 shares authorized, 75 shares outstanding, 75 treasury shares, and 50 authorized but unissued shares

Question 10

Which of the following is not a typical characteristic of a corporation?

1. separate entity
2. perpetual existence
3. shareholder personal liability
4. centralized management
5. transferability of interests

Answer 10

3. shareholder personal liability