Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Law
Q:
Cotton Products Corporation is a public company whose shares are traded in the public securities markets. The Securities Act of 1933 requires Cotton to disclose financial and other significant information concerning its securities in order to
a. increase corporate accountability by imposing responsibility on chief corporate executives.
b. prevent insiders from trading among themselves.
c. protect investors.
d. provide a "safe harbor" for companies that make forward-looking statements.
Q:
Frothy Beverage Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Frothy is required to
a. contribute to the operations of national stock exchanges.
b. disclose financial and other information about its securities.
c. engage in market surveillance to deter undesirable practices.
d. solicit proxies for voting.
Q:
A major problem facing the Securities and Exchange Commission is how to enforce the antifraud provisions of the securities laws in the online environment.
Q:
Corporations' chief executive officers are directly accountable for the accuracy of financial statements filed with the Securities and Exchange Commission.
Q:
Willful violations of the Sarbanes-Oxley Act of 2002 may be subject to harsh penalties.
Q:
Corporate governance can be defined as the relationship between a corporation and its directors.
Q:
Generally, federal securities law are patterned after states' antifraud laws.
Q:
"Blue sky laws" regulate securities data stored in cloud computing servers.
Q:
State securities laws apply mainly to intrastate transactions.
Q:
Private parties cannot sue violators of Section 10(b) and Rule 10b-5.
Q:
Violations of the Securities Exchange Act of 1934 may be subject to criminal prosecution, but not civil liability.
Q:
"Forward-looking" financial forecasts are prohibited under SEC Rule 10b-5.
Q:
A corporation can recapture any profits realized by an insider on any purchase or sale of the firm's stock within any six-month period.
Q:
Only outsiders who would ordinarily be deemed fiduciaries of the corporations in whose stock they trade can be liable for insider trading.
Q:
Buying or selling securities on the basis of nonpublic information is illegal only if the profit from the transaction is unreasonable.
Q:
The key to liability under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 is whether undisclosed inside information is material.
Q:
SEC Rule 10b-5 applies to almost all cases involving the trading of securities.
Q:
Section 10(b) of the Securities Exchange Act of 1934 covers only corporate officers and directors.
Q:
SEC Rule 10b-5 prohibits the commission of fraud in connection with the purchase or sale of any security.
Q:
The Securities Exchange Act of 1934 provides for continuous, periodic disclosures by publicly held corporations.
Q:
Any corporation with less than $10 million in assets and fewer than five hundred shareholders must register their securities with the Securities and Exchange Commission.
Q:
Private parties can sue violators of the Securities Act of 1933.
Q:
Against a charge of a violation of the Securities Act of 1933, only an issuer of stock can assert the due diligence defense.
Q:
Willful violations of the Securities Act of 1933 may be subject to civil liability, but not criminal prosecution.
Q:
Securities that are exempt from the registration requirement can generally be sold and resold without being registered.
Q:
Few securities can be resold without registration.
Q:
Private offerings of securities in unlimited amounts can be exempt from the registration requirement of the Securities Act of 1933.
Q:
Securities of nonprofit, educational, and charitable organizations are not exempt from the registration requirement of the 1933 Securities Act.
Q:
Generally, stock offerings that involve a small dollar amount are exempt from the registration requirement.
Q:
A corporation whose security does not qualify for an exemption can avoid the cost and complexity associated with registration.
Q:
Generally, stock offerings that are made in a limited manner during any twelve-month period are exempt from the registration requirement.
Q:
Before filing a registration statement, an issuer must offer to sell securities.
Q:
Sales of securities must occur within five days of registration.
Q:
A registration statement must state how a corporation plans to use the proceeds from the sale of the securities.
Q:
A registration statement must include a financial statement certified by an independent public accounting firm.
Q:
A free-writing prospectus may be used before the Securities and Exchange Commission completes its review of a related registration statement.
Q:
One of the most common forms of securities are bonds issued by corporations.
Q:
Brock is a shareholder of Competent Homebuilders Corporation (CHC). For the last few years, business has not been profitable for CHC. The firm has lost money on its operations. There has been some profit through sales of company assets, but the board of directors has refused to declare a dividend. This last year, the firm's accountants failed to file federal income tax returns and the board refused to pay the tax. Brock takes a close look at the firm and protests to the board, in particular over the failure to declare a dividend, but the board ignores the complaint. Which of these events, if any, would form a ground for a court to order the dissolution of CHC, on Brock's petition? If the court denies the petition, could Brock and the other shareholders dissolve CHC?
Q:
Natural Food Corporation proposes to combine with Organic Produce, Inc., and asks Natural Food shareholders to vote on the proposal. Phoebe, a Natural Food shareholder, votes against it, but is outvoted by the other shareholders. Is there an action that Phoebe can take to avoid being forced to go along with the transaction? If so, what can she do? After the combination, Organic Produce ceases to exist. Natural Food is the surviving firm. What type of combination is this?
Q:
Diversified Corporation's articles of incorporation prohibit a sale of its assets without a vote of the board of directors. Diversified's officers sell some assets to Enterprise Company without notice to the board. The officers also fail to pay Diversified's taxes on time, and some Diversified funds are not accounted for.
The appropriate remedy is most likely
a. a sale of the rest of Diversified's assets to its directors and shareholders.
b. Diversified's consolidation or merger with Enterprise.
c. Diversified's dissolution.
d. payment of damages to Diversified's officers.
Q:
Diversified Corporation's articles of incorporation prohibit a sale of its assets without a vote of the board of directors. Diversified's officers sell some assets to Enterprise Company without notice to the board. The officers also fail to pay Diversified's taxes on time, and some Diversified funds are not accounted for.
With respect to Diversified's shareholders, this conduct is most likely
a. not oppressive because it is undertaken by Diversified's officers.
b. oppressive because Diversified's directors may be personally liable.
c. oppressive because Diversified's shareholders may be personally liable.
d. oppressive because it departs from the standards of fair dealing.
Q:
Sangfroid Business Corporation can be compelled to dissolve by
a. its creditors only.
b. itself, through its shareholders and directors, only.
c. itself, through its shareholders and directors, or the state.
d. the state only.
Q:
Popular Movies Corporation wants to gain control of Quality Films, Inc. The companies negotiate for several months, without coming to terms. Popular Movies decides to pursue a takeover attempt. Quality Films decides to resist.
Quality Films solicits a merger with Real2Reel Corporation, a third party, which makes a better offer to Quality Films's shareholders. Real2Reel is a
a. crown jewel.
b. Pac-Man.
c. poison pill.
d. white knight.
Q:
Popular Movies Corporation wants to gain control of Quality Films, Inc. The companies negotiate for several months, without coming to terms. Popular Movies decides to pursue a takeover attempt. Quality Films decides to resist.
Quality Films issues shares that its shareholders can exchange for cash if a takeover is successful, intending to make Popular Movies's takeover attempt too expensive. This is a
a. crown jewel defense.
b. Pac-Man defense.
c. poison pill defense.
d. white knight defense.
Q:
Salt Corporation wants to acquire or merge with Pepper Corporation. Salt should
a. file a plan of merger with the secretary of state.
b. file an article of merger with Pepper.
c. make a tender offer to the shareholders of Pepper.
d. make a tender offer to the shareholders of Salt.
Q:
Ruff Games, Inc., wishes to acquire a controlling interest in Smart Toy Company by buying its stock. Smart Toy is
a. an alien corporation.
b. an acquiring corporation.
c. a receiver.
d. a target corporation.
Q:
Corporate Properties, Inc., attempts to acquire a substantial number of the shares of Downtown Investment Corporation through a public offer to Downtown's shareholders. This is
a. a consolidation.
b. a tender offer.
c. a short-form merger.
d. a termination.
Q:
Continental Capital, Inc., increases its holdings, making tender offers in many states. These offers are subject to
a. federal securities laws only.
b. state antitakeover statutes only.
c. no specific statutory requirements or limitations.
d. state antitakeover statutes and federal securities laws.
Q:
Bread & Bagels Corporation wants to purchase all of the assets of Coffee & Tea Inc. Dolly is a Coffee & Tea shareholder. The approval of Dolly and other Coffee & Tea shareholders is necessary
a. in all circumstances.
b. in no circumstances.
c. only if Coffee & Tea will be paid with unauthorized, unissued stock.
d. only if Bread & Bagels agrees to assume Coffee & Tea's liabilities.
Q:
Mediterranean Herbs Inc. wants to purchase all of the assets of Nature's Spice Company. Olina is a Nature's Spice shareholder. Approval of the deal must be obtained from the shareholders of
a. Mediterranean Herbs only.
b. Nature's Spice only.
c. both corporations.
d. neither corporation.
Q:
Ben is a shareholder of Cotton Fabric, Inc., whose management is considering extending its operations through some type of combination or acquisition with Denim Dungaree Corporation. Ben could normally exercise appraisal rights if Cotton Fabric participates in
a. a sale of substantially all of the corporate assets.
b. a dissolution.
c. a tender offer.
d. none of the choices.
Q:
Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation. With respect to Heavy Hydraulics's liabilities, Giant Lift is
a. automatically responsible.
b. not responsible under any circumstances.
c. responsible if Heavy Hydraulics is a competitor of Giant Lift.
d. responsible if the sale is in fact a merger or consolidation.
Q:
Raven is a shareholder of Quantum Mechanix Corporation. Raven could normally exercise appraisal rights if Quantum participated in
a. a consolidation.
b. a dissolution.
c. a liquidation.
d. a winding up.
Q:
Broncobuster BarBQ Company and Cowpuncher Cuisine, Inc. decide to combine. Deanna, a Cowpuncher shareholder, is dissatisfied with the price that she will receive for her stock. In the absence of fraud or other illegal conduct, Deanna's exclusive remedy is to
a. exercise an appraisal right.
b. file a suit to delay the process.
c. refuse to agree to the deal, which cannot then proceed.
d. acquire stock from the other shareholders and thereby obtain corporate control.
Q:
Algorhythm Stock Trades, Inc., and Big Data Market Analyses, Inc., plan to merge. Most likely, the articles of merger will be filed with
a. the county recording office.
b. the local chamber of commerce.
c. the state's secretary of state.
d. the Securities and Exchange Commission.
Q:
Mall Stores Corporation owns 95 percent of the shares of Niche Retail Corporation. Mall Stores combines with Niche Retail, but only Mall Stores continues to exist. This transaction was
a. a consolidation.
b. a tender offer.
c. a short-form merger.
d. a termination.
Q:
Realty Credit Company and Second Mortgage Corporation plan to consolidate. Most likely, the articles of consolidation will be filed with
a. the county recording office.
b. the Securities and Exchange Commission.
c. the state's secretary of state.
d. the local chamber of commerce.
Q:
Precise Device Corporation and Quality Instruments, Inc., decide to merge. This corporate combination does not require the approval of
a. Precise and Quality's directors.
b. Precise and Quality's officers and employees.
c. Precise's shareholders.
d. Quality's shareholders.
Q:
Jen files a suit against Kopper Kettle Company. While the suit is pending, Kopper Kettle merges with Luminous Pans, Inc., with Luminous absorbing Kopper Kettle. Now, liability in the suit, if any, rests with
a. Jen.
b. Kopper Kettle.
c. Luminous.
d. no one.
Q:
Eye Appliance Company and Fresh Views, Inc., wish to combine all of their assets, stock, and personnel into a new firm to be called Goggles Corporation. This is
a. a consolidation.
b. a merger.
c. an exchange of assets.
d. a takeover.
Q:
Eagle Financial Corporation merges with First Bank Corporation, with Eagle Financial absorbing First Bank. After the merger
a. a different, new corporation is the surviving corporation.
b. Eagle Financial and First Bank are both surviving corporations.
c. Eagle Financial is the surviving corporation.
d. First Bank is the surviving corporation.
Q:
Ground-Up Construction Corporation (CCC) has a right of action against Heavyquip, Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors absorbing Ground-Up. After the merger, Ground-Up's right of action against Heavyquip can be exercised by
a. Ground-Up.
b. Investors.
c. Heavyquip.
d. no one.
Q:
A merger between Blended Coffee Corporation and Cowland Creamery Inc. can be expressed as Blended Coffee + Cowland Creamery =
a. Cowland Creamery.
b. Delite Dairy Corporation.
c. Delite Dairy Corporation + EZ Stir & Sip Inc.
d. EZ Stir & Sip Inc.
Q:
Through a certain transaction, Coffee Bean Cafs, Inc., acquires all of the shares of Deli Dining Corporation for some of Coffee Bean's shares. Both Coffee Bean and Deli Dining continue to exist. This is
a. a consolidation.
b. a share exchange.
c. a short-form merger.
d. a purchase of assets.
Q:
Lorelei files a suit against Memphis Recording Company. While the suit is pending, Memphis Recording consolidates with Nashville Music Corporation to form Omni Productions, Inc. Now, liability in the suit, if any, rests with
a. Omni.
b. Memphis Recording and Nashville Music.
c. Lorelei.
d. no one.
Q:
Shale Oil Processing Corporation combines its assets and debts with those of Tierra Frakking Company to form United Resources, Inc. Shale and Tierra cease to exist.
United Resources acquires
a. all of Shale's and Tierra's assets.
b. half of Shale's and Tierra's assets.
c. none of Shale's and Tierra's assets unless there is a formal transfer.
d. only assets that Shale and Tierra acquired after a combination was proposed.
Q:
Shale Oil Processing Corporation combines its assets and debts with those of Tierra Frakking Company to form United Resources, Inc. Shale and Tierra cease to exist.
The formation of United Resources is
a. a consolidation.
b. a merger.
c. a purchase of assets.
d. a share exchange.
Q:
Shale Oil Processing Corporation combines its assets and debts with those of Tierra Frakking Company to form United Resources, Inc. Shale and Tierra cease to exist.
United Resources assumes
a. all of Shale's and Tierra's debts.
b. half of Shale's and Tierra's debts.
c. none of Shale's and Tierra's debts unless there is a formal transfer of liability.
d. only debts that Shale and Tierra incurred after a combination was proposed.
Q:
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
The articles of merger include changes that differ from Hilltop's articles of incorporation. The articles of incorporation
a. are deemed amended to include the changes.
b. are replaced by the articles of merger.
c. effectively prevent the merger.
d. preempt the articles of merge.
Q:
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
Grandview held rights in certain real property. After the merger, Hilltop acquires the rights
a. automatically.
b. only after completing certain additional statutory procedures.
c. only Grandview's former shareholders expressly approve.
d. only after a required formal transfer.
Q:
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only Hilltop remains.
Grandview owed money to Innovative Dcor, Inc., and other creditors. After the merger, Hilltop must pay
a. all of Grandview's debts.
b. half of Grandview's debts.
c. none of Grandview's debts unless there is a formal transfer of liability.
d. only debts that Grandview incurred after a merger was proposed.
Q:
Natural Laminate Corporation and Oak Wood Flooring Company combine so that all that remains after the papers have been signed is Natural Laminate. This is
a. a consolidation.
b. a merger.
c. a purchase of assets.
d. a share exchange.
Q:
Like other corporations, Restwell Hotels Inc. can extend its operations through
a. liquidating and distributing its assets.
b. buying the assets of, or a controlling interest in, another corporation.
c. filing articles of dissolution with the state.
d. appointing a receiver to wind up the corporate affairs.
Q:
Like other corporations, Western Steel Corporation can extend its operations through
a. a merger.
b. a dissolution.
c. a termination.
d. a winding up.
Q:
When deciding which form of business organization to choose, businesspersons normally consider only one factor.
Q:
When dissolution is involuntary, the court will appoint a receiver to wind up the corporate affairs.
Q:
33. A state court can dissolve a corporation for committing fraud to the state during incorporation.
Q:
A state court can dissolve a corporation for engaging in ultra vires acts.
Q:
A court cannot dissolve a corporation for mismanagement.
Q:
When dissolution takes place by voluntary action, the shareholders are responsible for winding up the affairs of the corporation.