LES 305: Week 13 || 100% Valid Solutions.
Pooling Agreement correct answers Agreement among shareholders to vote their stock a certain
way
Voting Trust correct answers Arrangement among shareholders to gain uniform voting and some
power by signing over voting rights on shares to a trustee, shareholders still get dividends, bust
trustee votes the shares; must be in writing and recorded with the corporation
Articles of Organization correct answers Contract governing the rights and relations of limited
partners
Advances correct answers In partnerships, loans by the partners to the partnership; makes the
partner a creditor of the partnership
Limited Liability Company (LLC) correct answers A business entity with limited liability but
management participation permitted by all; created by statute
Revised Uniform Partnership Act ( RUPA) correct answers Newest uniform revision of law on
limited partnerships
General Partner correct answers Partner in a general or limited partnership whose personal assets
are subject to partnership creditors in the event of nonpayment of partnership debts
Proxy correct answers Right (given in written form) to vote another's shares
Business judgment Rule correct answers Duty of care imposed upon members of corporate
boards that require adequate review of issues and information, devotion of adequate time to
deliberations, and hiring of outside consultants as necessary for making decisions, the standard
does not require foolproof judgment, only reasonable care in making judgment
Foreign Corporations correct answers A corporation in any state except the state in which it is
incorporated
Dissenting shareholder correct answers Shareholder who has objected to a merger or
consolidation and votes against it; is entitled to receive the value of her shares before the merger
or consolidation
Dodd-Frank Wall Street Reform and Consumer Financial Protection Act correct answers Federal
law over 2000 pages in length that increases and modifies the regulation of financial markets,
investment firms, securities analysts, rating agencies, corporate boards, and consumer credit
(including mortgage disclosures)
Articles of Limited Partnership correct answers Contract governing the rights and relations of
limited partners
, Partnership by Estoppel correct answers The conduct of two or more parties leads others to
believe a partnership exists. Arise when others are led to believe there is a partnership
Limited Partnership correct answers Type of partnership in which some partners have unlimited
liability (general partner) and other partners only have their investments at risk in the business
(limited partners); must follow statutory procedures to properly create a limited partnership
S Corporation correct answers A form of corporation for tax purposes that permits the direct
flow-through of income and losses to the shareholders; no income tax on the entity and no
personal liability for the owners for business debts.
Bylaws correct answers Operating rules of a corporation and its board; usually describe the
officers and their roles and authority, along with meeting procedures and notices
Limited Liability Partnership correct answers Partnership in which all partners have limited
liability; statutory creature with strict formation requirements
Model Business Corporation Act (MBCA) correct answers Uniform law on corporations
Freeze-Out correct answers Merger undertaken with the objective of eliminating minority
shareholders
Initial meeting correct answers First meeting of a corporation's organizers after the state provides
certification that the corporation exists
Novation correct answers Process of reworking a contract to substitute parties or terms, so that
the old contract is abandoned and the new contract becomes the only valid contract
Articles of Incorporation correct answers Organizational papers of a corporation; list the
company's structure, capitalization, board structure, and so on
Professional Corporations correct answers A statutory entity that permits professionals such as
lawyers and doctors to incorporate and enjoy limited personal liability on all debts except for
those arising from malpractice
Preferred Stock correct answers Usually nonvoting shares of a corporation entitling its holders to
dividend preference above the common shareholders
Board of Directors correct answers Policy-setting governing group of a corporation
Dissolution correct answers In partnerships, occurs when on partner ceases to be associated with
the business; in corporations, the termination of the corporate existence
Corporations correct answers Business entity created by statute that provides limited liability for
its owners
Pooling Agreement correct answers Agreement among shareholders to vote their stock a certain
way
Voting Trust correct answers Arrangement among shareholders to gain uniform voting and some
power by signing over voting rights on shares to a trustee, shareholders still get dividends, bust
trustee votes the shares; must be in writing and recorded with the corporation
Articles of Organization correct answers Contract governing the rights and relations of limited
partners
Advances correct answers In partnerships, loans by the partners to the partnership; makes the
partner a creditor of the partnership
Limited Liability Company (LLC) correct answers A business entity with limited liability but
management participation permitted by all; created by statute
Revised Uniform Partnership Act ( RUPA) correct answers Newest uniform revision of law on
limited partnerships
General Partner correct answers Partner in a general or limited partnership whose personal assets
are subject to partnership creditors in the event of nonpayment of partnership debts
Proxy correct answers Right (given in written form) to vote another's shares
Business judgment Rule correct answers Duty of care imposed upon members of corporate
boards that require adequate review of issues and information, devotion of adequate time to
deliberations, and hiring of outside consultants as necessary for making decisions, the standard
does not require foolproof judgment, only reasonable care in making judgment
Foreign Corporations correct answers A corporation in any state except the state in which it is
incorporated
Dissenting shareholder correct answers Shareholder who has objected to a merger or
consolidation and votes against it; is entitled to receive the value of her shares before the merger
or consolidation
Dodd-Frank Wall Street Reform and Consumer Financial Protection Act correct answers Federal
law over 2000 pages in length that increases and modifies the regulation of financial markets,
investment firms, securities analysts, rating agencies, corporate boards, and consumer credit
(including mortgage disclosures)
Articles of Limited Partnership correct answers Contract governing the rights and relations of
limited partners
, Partnership by Estoppel correct answers The conduct of two or more parties leads others to
believe a partnership exists. Arise when others are led to believe there is a partnership
Limited Partnership correct answers Type of partnership in which some partners have unlimited
liability (general partner) and other partners only have their investments at risk in the business
(limited partners); must follow statutory procedures to properly create a limited partnership
S Corporation correct answers A form of corporation for tax purposes that permits the direct
flow-through of income and losses to the shareholders; no income tax on the entity and no
personal liability for the owners for business debts.
Bylaws correct answers Operating rules of a corporation and its board; usually describe the
officers and their roles and authority, along with meeting procedures and notices
Limited Liability Partnership correct answers Partnership in which all partners have limited
liability; statutory creature with strict formation requirements
Model Business Corporation Act (MBCA) correct answers Uniform law on corporations
Freeze-Out correct answers Merger undertaken with the objective of eliminating minority
shareholders
Initial meeting correct answers First meeting of a corporation's organizers after the state provides
certification that the corporation exists
Novation correct answers Process of reworking a contract to substitute parties or terms, so that
the old contract is abandoned and the new contract becomes the only valid contract
Articles of Incorporation correct answers Organizational papers of a corporation; list the
company's structure, capitalization, board structure, and so on
Professional Corporations correct answers A statutory entity that permits professionals such as
lawyers and doctors to incorporate and enjoy limited personal liability on all debts except for
those arising from malpractice
Preferred Stock correct answers Usually nonvoting shares of a corporation entitling its holders to
dividend preference above the common shareholders
Board of Directors correct answers Policy-setting governing group of a corporation
Dissolution correct answers In partnerships, occurs when on partner ceases to be associated with
the business; in corporations, the termination of the corporate existence
Corporations correct answers Business entity created by statute that provides limited liability for
its owners
