Question

1.Ratification:

a.

does not give the principal the benefit of contracts entered into by the agent.

b.

releases the agent from liability to the principal and the third party.

c.

can be effective only if the agent did not disclose the principal to the third party.

.

d.must be expressed and may not be implied from the actions of the principal.

2.

Note: this question may have more than one correct answer.    Under the revised MBCA, if there are business debts following a defective incorporation, liability for the debts will be imposed on which of the following?

a.

Shareholders who participated in management and policy decisions and knew of the defective incorporation.

b.

Managers who participated in decision-making while the corporation was operating.

c.

Promoters who knew of the defective incorporation.

.

d.Shareholders who acted as if a corporation had been formed.

3.

Note: this question may have more than one correct answer.    Which factors are required for the formation of an LLC?

a.

Annual reports should be filed with the Secretary of State.

b.

The name of the LLC must include the words "limited liability company" or some other clear indication of the limited liability feature.

c.

It must be set up so that it can be easily dissolved.

d. Articles must be filed with the Secretary of State.

4.

Note: this question may have more than one correct answer.   Which of the following are characteristics of a closely held corporation?

a.

minority shareholders are provided more protection than in regular corporations

b.

the corporation can typically operate without a board of directors

c.

the shareholders usually restrict share transfer

d.the shares are not publicly traded

5.

Note: this question may have more than one correct answer.  Which of the following statements are True about the Securities Exchange Act of 1934?

a.

It is a blue-sky law.

b.

It regulates short-swing profits in order to stop speculative insider trading.

c.

Rule 10b-5 of the Securities And Exchange Act of 1934 applies to securities that do not have to be registered.

d.It requires periodic disclosures from issuers of securities.

6.

Title VII of the Civil Rights Act of 1964 precludes discrimination against which of the following persons:

	a.	women
	b.	homosexua and lesbian persons
	c.	persons with physical disabilities
	d.	persons who were not born in the USA

Answer 1

1. does not give the principal the benefit of contracts entered into by the agent

The contracts entered into by the agent without authority are invalid. Ratification can be both implied and express. Ratification does not release the agent from liability and for ratification to be valid, the principal must be both disclosed and named.

2. a, b and c

Promoters, managers and shareholders who both (1) knew of the defective corporation and (2) participated in management and policy decisions, are jointly and severally liable for business debts.

3. a, b and d

Annual reports and Articles must be filed with the secretary of state. The name must includes words such as Limited Liability Company or LLC or other such indication.

4. a,b,c,d all are correct for close corporation