BUL 3130 Legal and Ethical Environment of | UPDATED Questions
with 100% Verified Answers
Question: Yuliya is one of the directors of Sky Create, Incorporated a graphic design company. In which of the
following situations will a court most likely find that Yuliya breached her duty of care?
Answer:
Yuliya believes that a reporting officer has been acting suspiciously but still allows them to make decisions.
Question: The business judgment rule protects corporate officers and directors when ________.
Answer:
they set up a committee to establish a decision-making procedure that serves the best interests of the
corporation
Question: A court is most likely to pierce the corporate veil when the ________.
Answer:
liability claim involves a tort committed by the corporation's employees
Question: When principals wish to convert a privately held corporation to a publicly held corporation, they will
typically do which of the following?
Answer:
Engage in an initial public offering
Question: Baila is a member of the board of directors at Primus Corporation Baila failed to attend most of last
year's board meetings, claiming that she was unaware of their occurrence. During the meetings Baila did attend,
it was clear that she had not read the reports or financial records provided by the company and was not up to
date with the latest developments. In this scenario, Baila breached her duty of care primarily through ________.
Answer:
negligence
Question: Which of the following stakeholders of a corporation have the power to elect and remove directors at
their annual meetings?
Answer:
Shareholders
Question: Which of the following is a true statement regarding an S corporation?
Answer:
It can distribute earnings without incurring double level taxation
, Question: Which of the following is a true statement regarding the taxation of a C corporation?
Answer:
In a C corporation, both the entity and the shareholders pay tax through a system of double taxation
Question: Corporate bylaws typically set the procedures and requirements for electing a board of directors.
When the bylaws specify the number of shareholders who must be present to hold a vote, this is known as the
________ requirement.
Answer:
quorum
Question: Which of the following is a true statement regarding privately held corporations?
Answer:
They often use unanimous consent resolutions to handle tasks like electing directors or issuing stock.
Question: Section 16b of the Securities Act of 1934 allows a corporation to recapture any profits earned by an
insider on a purchase or sale of the company's stock that occurred within a six-month period. This is known as a
________ provision
Answer:
clawback
Question: The Securities Act of 1933 mandates all but which of the following?
Answer:
Only accredited investors may purchase securities
Question: The national clearinghouse for public corporation disclosures and filings is made available to the
public through the Security and Exchange Commission's (SEC's) computer database known as ________.
Answer:
EDGAR
Question: Equity payments made to common stock owners based on the profitability of the company are called
________.
with 100% Verified Answers
Question: Yuliya is one of the directors of Sky Create, Incorporated a graphic design company. In which of the
following situations will a court most likely find that Yuliya breached her duty of care?
Answer:
Yuliya believes that a reporting officer has been acting suspiciously but still allows them to make decisions.
Question: The business judgment rule protects corporate officers and directors when ________.
Answer:
they set up a committee to establish a decision-making procedure that serves the best interests of the
corporation
Question: A court is most likely to pierce the corporate veil when the ________.
Answer:
liability claim involves a tort committed by the corporation's employees
Question: When principals wish to convert a privately held corporation to a publicly held corporation, they will
typically do which of the following?
Answer:
Engage in an initial public offering
Question: Baila is a member of the board of directors at Primus Corporation Baila failed to attend most of last
year's board meetings, claiming that she was unaware of their occurrence. During the meetings Baila did attend,
it was clear that she had not read the reports or financial records provided by the company and was not up to
date with the latest developments. In this scenario, Baila breached her duty of care primarily through ________.
Answer:
negligence
Question: Which of the following stakeholders of a corporation have the power to elect and remove directors at
their annual meetings?
Answer:
Shareholders
Question: Which of the following is a true statement regarding an S corporation?
Answer:
It can distribute earnings without incurring double level taxation
, Question: Which of the following is a true statement regarding the taxation of a C corporation?
Answer:
In a C corporation, both the entity and the shareholders pay tax through a system of double taxation
Question: Corporate bylaws typically set the procedures and requirements for electing a board of directors.
When the bylaws specify the number of shareholders who must be present to hold a vote, this is known as the
________ requirement.
Answer:
quorum
Question: Which of the following is a true statement regarding privately held corporations?
Answer:
They often use unanimous consent resolutions to handle tasks like electing directors or issuing stock.
Question: Section 16b of the Securities Act of 1934 allows a corporation to recapture any profits earned by an
insider on a purchase or sale of the company's stock that occurred within a six-month period. This is known as a
________ provision
Answer:
clawback
Question: The Securities Act of 1933 mandates all but which of the following?
Answer:
Only accredited investors may purchase securities
Question: The national clearinghouse for public corporation disclosures and filings is made available to the
public through the Security and Exchange Commission's (SEC's) computer database known as ________.
Answer:
EDGAR
Question: Equity payments made to common stock owners based on the profitability of the company are called
________.
