Question

Question 8

1 pts

Which of the following statements regarding the business judgment rule is/are TRUE?

Group of answer choices

A shareholder may choose whether to file a derivative lawsuit or alternatively demand that the board of directors take action.

The party in interest of a derivative lawsuit is the shareholder who files the lawsuit.

A court will not second-guess directors who vote to block a corporate merger, as long as they view the merger as a hostile takeover.

The business judgment rule can protect directors in the context of a derivative lawsuit, even if the court finds that the directors exercised poor judgment.

All of the above statements are TRUE.

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Question 9

1 pts

Abby, Igor, Ted, and Melissa operate the Black Tie Diner restaurant in partnership, in a state that has enacted the RUPA. Melissa was approached by the local university to teach full-time in its renowned hospitality program. She accepted this position and left the partnership. Because Melissa had been handling produce purchases and bookings for wedding receptions, the firm wants to continue in business but announce that Melissa is no longer a partner. In order to accomplish this, the firm should file a statement of:

Group of answer choices

partnership authority.

dissociation.

denial.

dissolution.

congratulations.

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Question 10

1 pts

Mike, Dennis, Larry, and Pete are brothers and sole shareholders in the Our Gang Corporation, a close corporation. They are all officers and directors, and share in the day-to-day management of the company. Under which of the following scenarios might the brothers be personally liable for the debts of the corporation?

Group of answer choices

If they fail to hold an annual shareholder meeting

If Dennis, the CFO, deposits accounts receivables in his personal bank account

If they hire their children to work in the company

A and B only

A, B and C

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Question 11

1 pts

Duff is a school teacher who bakes cakes in the summers and sells them to his friends. Last year, his colleague Martha, also off for the summer, began to help out. She concocted a popular cake using lemons she bought from her neighbor's orchard, and brought in new customers from her neighborhood. Duff agreed to pay Martha half of the profits from the business. Which best describes the business organization?

Group of answer choices

A sole proprietorship, where Duff is the owner and Martha is an employee

An express partnership, where Duff and Martha have entered into an agreement to be co-owners of a business

A partnership by estoppel, where Duff is estopped from claiming that Martha is not his partner because Martha relied on Duff's actions in treating her like a partner

An implied partnership, based on the fact that Duff and Martha shared the profits of the business, Martha incurred debts on behalf of the organization, and Martha participated in decision-making

A limited liability company, because Duff and Martha want to avoid paying damages if someone contracts food poisoning from eating a cake

Answer 1

8. A shareholder may choose whether to file a derivative lawsuit or alternatively demand that the board of directors take action

( Party in interest of lawsuit is the corporation and this rule doesnot protect directors who exercise poor judgement)

9. Dissociation

(Firm should file a statement of dissociation stating the name of the partnership and the partner who is dissociated)

10. A and B only

( They will become personally liable where they are found to have carried on the business recklessly, fraudulently or with negligence)

11. An implied partnership, based on the fact that Duff and Martha shared the profits of the business, Martha incurred debts on behalf of the organization, and Martha participated in decision-making

(Implied partnership is not expressesd. It is apparent from the actions of parties involved. It is not written or spoken)