BULE Exam #4 questions well
answered graded A+
example 18.1 supreme court limits discrimination claims against employers as a group - correct
answer ✔✔A group of female employees sued Wal-Mart. The employees alleged that store
managers who had discretion over pay and promotions were biased against women and
disproportionately favored men. The United States Supreme Court ruled in favor of Wal-Mart,
effectively blocking the class action (a lawsuit in which a small number of plaintiffs sue on behalf
of a larger group). The Court held that the women could not maintain a class action because
they had failed to prove a company-wide policy of discrimination that had a common effect on
all women included in the class. Therefore, they could not maintain a class action.
Directors - correct answer ✔✔- make corporate policy and hire officers
- rights: participation, inspection, indemnification
- duties: loyalty, care, not commit waste
- liabiilty: no personal liability unless (1) you're a wrongdoer and (2) piercing of the corporate
veil
- NO SINGLE AGENT; cannot bind the corporation into contracts; the board as a WHOLE can bind
the corporation
- fiduiciary
shareholders - correct answer ✔✔- owners
,- rights: elect directors, dividends if board declares them, rights upon dissolution, derivative
lawsuits (lawsuit brought by a shareholder to force a corporation to take some action)
- liability: limited liability except for piercing the corporate veil
duty of loyalty - correct answer ✔✔- usurping ( taking away business oportunities)
- duty no to compete
- conflict of interest
-
corporate governance - correct answer ✔✔- goverance and corporate law
-Sarbanes-Oxley Act requires companies to: (1) set up confidential reporting systems for
unethical or illegal behavior and (2) hold chief executives responsible for completeness and
accuracy of all financial statements
corporate dissolution - correct answer ✔✔-voluntary dissolution (BOD and shareholders agree
to dissolve)
- administrative dissolution (Secretary of state can create and dissolve)
- judicial dissolution (court ordered corporation to be dissolved --usually involving illegal
activity)
,officers - correct answer ✔✔- manage day-to-day operations
- duties: loyalty, care
- liability: can be fired by BOD; no personal liability for debts for corporation unless (1) they are
a wrongdoer and (2) court has pierced the corporate veil
- fidicuiary and agent of the corporation
Acme, Inc., a publicly traded company with a market value of $50 million,
a. is exempt from filing an auditor's report on management's assessment of internal controls.
b. is exempt from filing stock transaction reports with the SEC.
c. is exempt from the requirement that its CFO certify the accuracy of the corporate financial
statements.
d. is exempt from the requirement to improve the directors' monitoring of officer's activities. -
correct answer ✔✔is exempt from filing an auditor's report on management's assessment of
internal controls.
Three essential elements of a partnership - correct answer ✔✔1. A sharing of profits and losses
2. A joint ownership of the business
3. An equal right in the management of the business
, example 18.2 procedures for resolving disparate treatment discrimination - correct answer
✔✔Samantha applies for employment with a construction firm and is rejected. If she sues on
the basis of disparate-treatment discrimination in hiring, she must show that:
(1) She is a member of a protected class.
(2)She applied and was qualified for the job in question.
(3)She was rejected by the employer.
(4)The employer continued to seek applicants for the position or filled the position with a
person not in a protected class.
If Samantha can meet these relatively easy requirements, she has made out a prima facie case
of illegal discrimination. This means that she has met her initial burden of proof and will win
unless the employer can present a legally acceptable defense.
The burden then shifts to the employer- who must articulate a legal reason for not hiring the
plaintiff. To prevail, the plaintiff must then show that the employer's reason is a pretext (not the
true reason) and that discriminatory intent actually motivated the employer's decision.
3 situations in which courts will ignore the corporate structure and pierce the corporate veil -
correct answer ✔✔- owners uses corporation to perpetuate fraud
- corporation used to circumvent the law
- corporation used to accomplish an illegitimate objective
factors that lead courts to pierce corporate veil - correct answer ✔✔- party is tricked into
dealing with the corporation rather than the individual
- corporation is set up to never make a profit or thinly capitalized at the start
answered graded A+
example 18.1 supreme court limits discrimination claims against employers as a group - correct
answer ✔✔A group of female employees sued Wal-Mart. The employees alleged that store
managers who had discretion over pay and promotions were biased against women and
disproportionately favored men. The United States Supreme Court ruled in favor of Wal-Mart,
effectively blocking the class action (a lawsuit in which a small number of plaintiffs sue on behalf
of a larger group). The Court held that the women could not maintain a class action because
they had failed to prove a company-wide policy of discrimination that had a common effect on
all women included in the class. Therefore, they could not maintain a class action.
Directors - correct answer ✔✔- make corporate policy and hire officers
- rights: participation, inspection, indemnification
- duties: loyalty, care, not commit waste
- liabiilty: no personal liability unless (1) you're a wrongdoer and (2) piercing of the corporate
veil
- NO SINGLE AGENT; cannot bind the corporation into contracts; the board as a WHOLE can bind
the corporation
- fiduiciary
shareholders - correct answer ✔✔- owners
,- rights: elect directors, dividends if board declares them, rights upon dissolution, derivative
lawsuits (lawsuit brought by a shareholder to force a corporation to take some action)
- liability: limited liability except for piercing the corporate veil
duty of loyalty - correct answer ✔✔- usurping ( taking away business oportunities)
- duty no to compete
- conflict of interest
-
corporate governance - correct answer ✔✔- goverance and corporate law
-Sarbanes-Oxley Act requires companies to: (1) set up confidential reporting systems for
unethical or illegal behavior and (2) hold chief executives responsible for completeness and
accuracy of all financial statements
corporate dissolution - correct answer ✔✔-voluntary dissolution (BOD and shareholders agree
to dissolve)
- administrative dissolution (Secretary of state can create and dissolve)
- judicial dissolution (court ordered corporation to be dissolved --usually involving illegal
activity)
,officers - correct answer ✔✔- manage day-to-day operations
- duties: loyalty, care
- liability: can be fired by BOD; no personal liability for debts for corporation unless (1) they are
a wrongdoer and (2) court has pierced the corporate veil
- fidicuiary and agent of the corporation
Acme, Inc., a publicly traded company with a market value of $50 million,
a. is exempt from filing an auditor's report on management's assessment of internal controls.
b. is exempt from filing stock transaction reports with the SEC.
c. is exempt from the requirement that its CFO certify the accuracy of the corporate financial
statements.
d. is exempt from the requirement to improve the directors' monitoring of officer's activities. -
correct answer ✔✔is exempt from filing an auditor's report on management's assessment of
internal controls.
Three essential elements of a partnership - correct answer ✔✔1. A sharing of profits and losses
2. A joint ownership of the business
3. An equal right in the management of the business
, example 18.2 procedures for resolving disparate treatment discrimination - correct answer
✔✔Samantha applies for employment with a construction firm and is rejected. If she sues on
the basis of disparate-treatment discrimination in hiring, she must show that:
(1) She is a member of a protected class.
(2)She applied and was qualified for the job in question.
(3)She was rejected by the employer.
(4)The employer continued to seek applicants for the position or filled the position with a
person not in a protected class.
If Samantha can meet these relatively easy requirements, she has made out a prima facie case
of illegal discrimination. This means that she has met her initial burden of proof and will win
unless the employer can present a legally acceptable defense.
The burden then shifts to the employer- who must articulate a legal reason for not hiring the
plaintiff. To prevail, the plaintiff must then show that the employer's reason is a pretext (not the
true reason) and that discriminatory intent actually motivated the employer's decision.
3 situations in which courts will ignore the corporate structure and pierce the corporate veil -
correct answer ✔✔- owners uses corporation to perpetuate fraud
- corporation used to circumvent the law
- corporation used to accomplish an illegitimate objective
factors that lead courts to pierce corporate veil - correct answer ✔✔- party is tricked into
dealing with the corporation rather than the individual
- corporation is set up to never make a profit or thinly capitalized at the start
