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Model Bus. Corp. Act § 10.02 (2016).
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1Who may amend a corporation’s articles of incorporation before the corporation first issues shares?
Who may amend a corporation’s articles of incorporation before the corporation first issues shares?2After a corporation first issues shares, do most amendments to the articles of incorporation require approval by both the board of directors and th...
After a corporation first issues shares, do most amendments to the articles of incorporation require approval by both the board of directors and the shareholders?3May some amendments to the corporation’s articles of incorporation be adopted by the board of directors without shareholder approval?
May some amendments to the corporation’s articles of incorporation be adopted by the board of directors without shareholder approval?4Under the Model Business Corporation Act (MBCA), what general procedure is required to amend the articles of incorporation if shareholder approval ...
Under the Model Business Corporation Act (MBCA), what general procedure is required to amend the articles of incorporation if shareholder approval is necessary?5In general, may an amendment to a corporation’s articles of incorporation add, change, or delete portions of the articles?
In general, may an amendment to a corporation’s articles of incorporation add, change, or delete portions of the articles?6After a corporation amends its articles of incorporation, must it file articles of amendment with the secretary of state?
After a corporation amends its articles of incorporation, must it file articles of amendment with the secretary of state?7In general, may a corporation’s articles of incorporation be amended to carry out a court-ordered reorganization without any action by the sharehol...
In general, may a corporation’s articles of incorporation be amended to carry out a court-ordered reorganization without any action by the shareholders or the board of directors?8In general, may a corporation’s bylaws be amended or repealed by either the shareholders or the board of directors?
In general, may a corporation’s bylaws be amended or repealed by either the shareholders or the board of directors?9As a corporation grew, the corporation’s board of directors decided to drop the state name at the end of the corporation’s name to make the corpora...
As a corporation grew, the corporation’s board of directors decided to drop the state name at the end of the corporation’s name to make the corporation appear more national. The board believed that this change was in the corporation’s best interests. The change required amending the articles of incorporation. However, several shareholders protested the change because they were concerned the corporation would lose name recognition in some important consumer areas. Without these shareholders’ votes, the board could not get shareholder approval for the amendment. The articles of incorporation were silent about whether this type of amendment required shareholder approval.Does the board need the approval of the shareholders to make this amendment to the articles of incorporation?10May a limited liability company (LLC) amend its certificate of organization at any time?
May a limited liability company (LLC) amend its certificate of organization at any time?11In general, may the terms of an LLC’s operating agreement specify the manner in which the operating agreement is to be amended?
In general, may the terms of an LLC’s operating agreement specify the manner in which the operating agreement is to be amended?12If the terms of an LLC’s operating agreement do not specify the manner in which the agreement may be amended, what are the default rules for amendm...
If the terms of an LLC’s operating agreement do not specify the manner in which the agreement may be amended, what are the default rules for amendment under the Uniform Limited Liability Company Act (ULLCA)?13Under the ULLCA, may an LLC’s operating agreement condition any amendment on the approval of a non-party to the agreement, or on the satisfaction o...
Under the ULLCA, may an LLC’s operating agreement condition any amendment on the approval of a non-party to the agreement, or on the satisfaction of a specified condition?14In the context of corporations and LLCs, what is a merger?
In the context of corporations and LLCs, what is a merger?15What is the effect of a merger on the property, contract rights, and liabilities of the acquired entity?
What is the effect of a merger on the property, contract rights, and liabilities of the acquired entity?16What is the effect of a merger on the shares or interests in the acquired entity?
What is the effect of a merger on the shares or interests in the acquired entity?17The board of directors of a national manufacturer acquired a competitor. As part of the acquisition, the national manufacturer and the competitor e...
The board of directors of a national manufacturer acquired a competitor. As part of the acquisition, the national manufacturer and the competitor entered into an agreement that provided the national manufacturer would not be liable for any creditor claims filed after the acquisition date and based on products sold by the competitor. After the acquisition, the competitor ceased to exist. However, in the months after the acquisition, a number of large claims were made based on equipment previously sold by the competitor. Is the national manufacturer potentially liable for these claims?18What is a plan of merger?
What is a plan of merger?19In general, must a corporation’s plan of merger be approved by the boards of directors and the shareholders of both parties?
In general, must a corporation’s plan of merger be approved by the boards of directors and the shareholders of both parties?20In general, must an LLC’s plan of merger be approved by all members?
In general, must an LLC’s plan of merger be approved by all members?21What is the general procedure for a corporation to obtain shareholder approval of a plan of merger?
What is the general procedure for a corporation to obtain shareholder approval of a plan of merger?22In general, may a party abandon a plan of merger at any time before the merger becomes effective?
In general, may a party abandon a plan of merger at any time before the merger becomes effective?23What are articles of merger?
What are articles of merger?24What is the relationship between a subsidiary corporation and a parent corporation?
What is the relationship between a subsidiary corporation and a parent corporation?25Under the MBCA, under what conditions may a subsidiary merge with either its parent corporation or with another subsidiary?
Under the MBCA, under what conditions may a subsidiary merge with either its parent corporation or with another subsidiary?26What are shareholder dissent and appraisal rights in the context of a corporate merger?
What are shareholder dissent and appraisal rights in the context of a corporate merger?27What is the general procedure for a shareholder to assert appraisal rights?
What is the general procedure for a shareholder to assert appraisal rights?28In the context of a merger or similar transaction, do the members of an LLC generally have appraisal rights?
In the context of a merger or similar transaction, do the members of an LLC generally have appraisal rights?29What is the de facto merger doctrine?
What is the de facto merger doctrine?30Two corporations entered an agreement in which the first corporation agreed to take on the second corporation’s assets, liabilities, and name. In e...
Two corporations entered an agreement in which the first corporation agreed to take on the second corporation’s assets, liabilities, and name. In exchange, the shareholders of the second, acquired corporation were issued stock in the first, acquiring corporation. Under the agreement, the second corporation’s stakeholders would continue to participate in the business after it was acquired. Some of the first corporation’s shareholders complained that this was a merger, but they had not received the mandatory pre-merger notice of their appraisal rights to cash out before the merger. The board responded that there was no merger plan, and this was merely a reorganization.Did a merger occur?31What is a corporate takeover?
What is a corporate takeover?32What is the name of a takeover approach in which a prospective buyer tries to gain control of a corporation by making a public offer to buy shares ...
What is the name of a takeover approach in which a prospective buyer tries to gain control of a corporation by making a public offer to buy shares from the corporation’s shareholders?33In the context of corporations, what is a consolidation?
In the context of corporations, what is a consolidation?34In general, must a consolidation be approved by the boards of directors and the shareholders of the parties?
In general, must a consolidation be approved by the boards of directors and the shareholders of the parties?35What is the effect of a consolidation on the property, contract rights, and liabilities of the parties?
What is the effect of a consolidation on the property, contract rights, and liabilities of the parties?36What is the effect of a consolidation on the shares of the acquired entity?
What is the effect of a consolidation on the shares of the acquired entity?37In general, is shareholder approval required for a corporation to sell or otherwise dispose of some or all of its assets in the usual course of bus...
In general, is shareholder approval required for a corporation to sell or otherwise dispose of some or all of its assets in the usual course of business?38In general, is shareholder approval required for a corporation to sell or otherwise dispose of its assets outside the usual course of business, and...
In general, is shareholder approval required for a corporation to sell or otherwise dispose of its assets outside the usual course of business, and in a way that would leave it without significant continuing business activity?39What is a recapitalization of a corporation?
What is a recapitalization of a corporation?40If a corporation’s recapitalization involves the issuance of more shares than authorized by the articles of incorporation, must the articles of inc...
If a corporation’s recapitalization involves the issuance of more shares than authorized by the articles of incorporation, must the articles of incorporation be amended before the new shares can be issued?41Does a recapitalization involving the issuance of different types of shares than those authorized by the articles of incorporation require a corpor...
Does a recapitalization involving the issuance of different types of shares than those authorized by the articles of incorporation require a corporation to amend articles of incorporation before the new shares can be issued?42If authorized by the articles of incorporation, may the board of directors either classify or reclassify unissued shares under terms set by the board?
If authorized by the articles of incorporation, may the board of directors either classify or reclassify unissued shares under terms set by the board?43What is a share exchange?
What is a share exchange?44What is a share-exchange plan?
What is a share-exchange plan?45In general, must a corporate share-exchange plan be approved by the board of directors and the shareholders of both parties?
In general, must a corporate share-exchange plan be approved by the board of directors and the shareholders of both parties?46Must an LLC’s plan of interest exchange be approved by all of the LLC’s voting members if the LLC is the acquired entity?
Must an LLC’s plan of interest exchange be approved by all of the LLC’s voting members if the LLC is the acquired entity?47In general, may a party abandon a plan of share exchange or interest exchange at any time before the merger becomes effective?
In general, may a party abandon a plan of share exchange or interest exchange at any time before the merger becomes effective?48What are articles of share exchange?
What are articles of share exchange?49Under the MBCA, do corporate shareholders have rights of dissent and appraisal in the context of a share exchange?
Under the MBCA, do corporate shareholders have rights of dissent and appraisal in the context of a share exchange?50What is the dissolution of a corporation?
What is the dissolution of a corporation?51Does dissolution transfer title to a corporation’s property?
Does dissolution transfer title to a corporation’s property?52Does dissolution prevent transfer of the corporation’s shares or other securities?
Does dissolution prevent transfer of the corporation’s shares or other securities?53Does dissolution change the standards of conduct required of the corporation’s directors and officers?
Does dissolution change the standards of conduct required of the corporation’s directors and officers?54Does dissolution change a corporation’s procedural requirements for voting, selection of its officers and directors, or amendment of its bylaws?
Does dissolution change a corporation’s procedural requirements for voting, selection of its officers and directors, or amendment of its bylaws?55Does dissolution prevent the filing of legal proceedings against the corporation, or suspend any pending legal proceedings?
Does dissolution prevent the filing of legal proceedings against the corporation, or suspend any pending legal proceedings?56Does dissolution terminate the authority of a corporation’s registered agent?
Does dissolution terminate the authority of a corporation’s registered agent?57What is a voluntary dissolution?
What is a voluntary dissolution?58Is a corporation authorized to carry out any tasks after it is dissolved?
Is a corporation authorized to carry out any tasks after it is dissolved?59If a corporation has not issued shares, or has not commenced doing business, may the corporation be dissolved by a majority of the incorporators or...
If a corporation has not issued shares, or has not commenced doing business, may the corporation be dissolved by a majority of the incorporators or initial directors?60May a corporation be voluntarily dissolved by agreement of the board of directors and the shareholders?
May a corporation be voluntarily dissolved by agreement of the board of directors and the shareholders?61Must all shareholders approve a corporation’s voluntary dissolution?
Must all shareholders approve a corporation’s voluntary dissolution?62What are articles of dissolution?
What are articles of dissolution?63May a corporation revoke a voluntary dissolution?
May a corporation revoke a voluntary dissolution?64A corporation was involved in complicated patent-infringement litigation with a competitor, and a loss would mean the end of the corporation. The c...
A corporation was involved in complicated patent-infringement litigation with a competitor, and a loss would mean the end of the corporation. The court ruled in the competitor’s favor. The corporation moved for the court to reconsider its decision but began the dissolution process. The board voted in favor of dissolution, and the shareholders followed suit at a properly noticed meeting. The board then filed the necessary dissolution paperwork with the state. One week after the dissolution became effective, the court reconsidered its ruling and ruled in the corporation’s favor. May the directors now revoke the corporation’s dissolution?65What is an administrative dissolution of a corporation?
What is an administrative dissolution of a corporation?66For what reasons may a state’s secretary of state administratively dissolve a corporation?
For what reasons may a state’s secretary of state administratively dissolve a corporation?67What is a judicial dissolution of a corporation?
What is a judicial dissolution of a corporation?68Under what circumstances may a state’s attorney general seek judicial dissolution of a corporation?
Under what circumstances may a state’s attorney general seek judicial dissolution of a corporation?69Under what circumstances may a shareholder seek judicial dissolution of a corporation?
Under what circumstances may a shareholder seek judicial dissolution of a corporation?70There were six directors on a corporation’s board. The board had splintered into two factions of three directors each, and the two factions voted a...
There were six directors on a corporation’s board. The board had splintered into two factions of three directors each, and the two factions voted against each other on every proposal. Because of this deadlock, proposals could not garner the necessary majority vote to be approved. All corporate business had come to a halt, and the corporation was losing clients rapidly. The shareholders sought to break the deadlock, but the articles of incorporation allowed shareholders to approve proposals only by super-majority vote. No proposal could get the super-majority level of shareholder support. May a shareholder have the corporation judicially dissolved?71May a creditor seek the judicial dissolution of a corporation?
May a creditor seek the judicial dissolution of a corporation?72An investor agreed to lend a distressed corporation $50,000 on an unsecured basis. The corporation agreed to repay the money within 90 days. Unfort...
An investor agreed to lend a distressed corporation $50,000 on an unsecured basis. The corporation agreed to repay the money within 90 days. Unfortunately, the corporation was unable to pay the debt when due because it was facing a liquidity crisis that had prevented it from paying any of its bill for the prior two months. The corporation sent the investor an email acknowledging that it was unable to make a timely payment on the debt. The investor wanted to force the corporation to dissolve in hopes of getting the debt paid through selling off the corporation’s capital assets. May the investor seek to have the corporation judicially dissolved?73Under what circumstances may a corporation seek its own judicial dissolution?
Under what circumstances may a corporation seek its own judicial dissolution?74What parties are authorized to seek judicial dissolution of a corporation?
What parties are authorized to seek judicial dissolution of a corporation?75In general, must a corporation’s shareholders be made parties to a suit for judicial dissolution?
In general, must a corporation’s shareholders be made parties to a suit for judicial dissolution?76What general forms of relief may the court provide in a judicial dissolution?
What general forms of relief may the court provide in a judicial dissolution?77What are the three types of corporate dissolution?
What are the three types of corporate dissolution?78If a corporation is dissolving, what must the corporation do to properly address known, unpaid claims against it?
If a corporation is dissolving, what must the corporation do to properly address known, unpaid claims against it?79A corporation’s board of directors and shareholders voted to dissolve the corporation. The corporation sent a dissolution notice to all known credi...
A corporation’s board of directors and shareholders voted to dissolve the corporation. The corporation sent a dissolution notice to all known creditors explaining that the corporation was dissolving and providing an address for making any claims. The notice also informed the creditors that all claims against the corporation would be barred unless the claims were filed within the next 90 days. Is this a valid notice of dissolution to known creditors?80A corporation’s board of directors and shareholders voted to dissolve the corporation. The corporation sent a dissolution notice to all known credi...
A corporation’s board of directors and shareholders voted to dissolve the corporation. The corporation sent a dissolution notice to all known creditors. This notice complied with all legal requirements, including explaining that the corporation was dissolving, giving an address for making claims, and setting a 150-day claim-filing deadline. A local vendor filed a claim with the corporation for $100,000. The corporation rejected the vendor’s claim, arguing that it had paid the bill last month. Does the corporation’s rejection automatically bar the local vendor from pursuing the claim any further?81If a corporation is dissolving, what must the corporation do to properly address possible unknown claims against it?
If a corporation is dissolving, what must the corporation do to properly address possible unknown claims against it?82A corporation’s board of directors voted to dissolve the corporation. The corporation anticipated that many currently unknown claims would be made ...
A corporation’s board of directors voted to dissolve the corporation. The corporation anticipated that many currently unknown claims would be made against it after dissolution. The directors understood that if the corporation provided some sort of notice to future unknown claimants, after three years, any unknown, unfiled claims against the dissolved corporation would be permanently barred. To try to trigger this protection, the directors posted a dissolution notice on the corporate website for one week. The notice gave all the legally required information: a mailing address for claims, the information needed to make a claim, and a statement that any claims would be barred unless an enforcement proceeding was brought within three years of the notice’s posting. Have the directors protected the corporation by barring any unknown claims that are not filed within the next three years?83May the shareholders of a dissolving corporation be held personally liable for payment of known and unknown claims against the corporation?
May the shareholders of a dissolving corporation be held personally liable for payment of known and unknown claims against the corporation?84May the directors of a dissolving corporation be held personally liable to the corporation if they do not make a reasonable provision for the payme...
May the directors of a dissolving corporation be held personally liable to the corporation if they do not make a reasonable provision for the payment of known and unknown claims against the corporation?85In a corporate dissolution, may the board of directors distribute corporate assets to shareholders before paying or providing for claims against th...
In a corporate dissolution, may the board of directors distribute corporate assets to shareholders before paying or providing for claims against the corporation?86A corporation had $100,000 in its bank account and no other assets. The corporation faced $90,000 in unpaid creditor claims. The corporation initia...
A corporation had $100,000 in its bank account and no other assets. The corporation faced $90,000 in unpaid creditor claims. The corporation initiated a voluntary dissolution. The board of directors voted to pay creditors one-third of their respective claim amounts, for a total of $30,000 to the creditors. The directors then distributed the remaining $70,000 in the bank account to the corporation’s shareholders. May the directors be held personally liable for the plan to address creditor claims?87A board of directors and the shareholders voted to dissolve a corporation that had manufactured trampolines. Based on historical data, the board of...
A board of directors and the shareholders voted to dissolve a corporation that had manufactured trampolines. Based on historical data, the board of directors knew that the corporation usually paid approximately $1 in tort claims for every 10 trampolines sold in a given year. In the past year, the corporation had sold 500,000 trampolines and, thus, anticipated $50,000 in tort claims from these sales. The corporation had $100,000 in its corporate account and no other assets. The corporation owed known creditors $50,000. The directors voted to pay all known creditors in full and then distributed the remaining funds to shareholders. May the directors be held personally liable for how the dissolving corporation’s $100,000 was distributed?88What procedure may a dissolving corporation follow to insulate its directors and shareholders from personal liability for unknown claims?
What procedure may a dissolving corporation follow to insulate its directors and shareholders from personal liability for unknown claims?89The board of directors and shareholders of a corporation voted to dissolve the corporation. The directors were having difficulty effectively estima...
The board of directors and shareholders of a corporation voted to dissolve the corporation. The directors were having difficulty effectively estimating the amount of funds that should be set aside to address future unknown claims against the dissolved corporation. The directors properly requested the state court to determine the appropriate amount of funds to set aside. The court issued a ruling providing an amount, and the directors set aside the funds in accordance with the court’s decision. The directors also published a proper constructive notice that barred any unknown claims not filed within three years of the notice. However, the designated funds were not sufficient to pay all the claims that were eventually submitted to the dissolved corporation. May the directors be held personally liable for the corporation’s failure to set aside sufficient funds to address the unknown claims?90In general, what events will cause the dissolution of an LLC?
In general, what events will cause the dissolution of an LLC?91May an LLC carry on any activities after dissolution?
May an LLC carry on any activities after dissolution?92May an LLC rescind its dissolution?
May an LLC rescind its dissolution?93May an LLC seek reinstatement after an administrative dissolution?
May an LLC seek reinstatement after an administrative dissolution?94If an LLC is dissolving, what must it do to properly address known, unpaid claims against it?
If an LLC is dissolving, what must it do to properly address known, unpaid claims against it?95Several friends formed an LLC and decided to run the company together. The LLC experienced several setbacks and was forced to dissolve. The LLC sen...
Several friends formed an LLC and decided to run the company together. The LLC experienced several setbacks and was forced to dissolve. The LLC sent a proper dissolution notice and a claim form to all its known creditors. A vendor received the notice and properly submitted a claim. However, the LLC rejected the claim and provided all proper notice of the rejection to the vendor. The vendor filed an action against the LLC five months after the LLC’s rejection of the claim. Is the vendor’s claim against the LLC barred?96If an LLC is dissolving, what notice must the LLC give to properly address possible unknown claims against it?
If an LLC is dissolving, what notice must the LLC give to properly address possible unknown claims against it?97Several friends formed an LLC and decided to run the company together. The LLC experienced several setbacks and was forced to dissolve. The LLC had...
Several friends formed an LLC and decided to run the company together. The LLC experienced several setbacks and was forced to dissolve. The LLC had no known creditors but anticipated that a number of unknown creditors could come forward after dissolution was complete. The friends decided to provide a dissolution notice to these creditors by posting a notice on the door of the LLC’s principal office, stating that the LLC had dissolved and including all other legally required content. Is this a legally sufficient way to give unknown creditors notice of the LLC’s dissolution?98Several friends formed an LLC and decided to run it together. Unfortunately, the LLC experienced several setbacks and was forced to dissolve. The L...
Several friends formed an LLC and decided to run it together. Unfortunately, the LLC experienced several setbacks and was forced to dissolve. The LLC anticipated a number of unknown creditors coming forward after dissolution. The LLC gave proper constructive notice to all unknown creditors. Two years after publication of the constructive notice, a person was injured by a product that the LLC had manufactured.May the injured person still bring a claim against the dissolved LLC?99What procedure may a dissolving LLC follow to insulate its members and transferees from personal liability for unknown claims?
What procedure may a dissolving LLC follow to insulate its members and transferees from personal liability for unknown claims?