Question 1

A compulsory share exchange:

Accepted Answer

A)   is a transaction by which the corporation becomes the owner of all the outstanding shares of one or more classes of another corporation by an exchange that is compulsory on all owners of the acquired shares.
B)   may be carried out by a corporation acquiring shares in another corporation with its or any other corporation's shares or other securities,but not for cash or other property.
C)   affects the separate existence of the corporate parties to the transaction.
D)   All of these.E) All of the above
F) B) and C)

Question 2

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 3

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

Accepted Answer

A)   purchaser,expressly or impliedly,agrees to assume the seller's liabilities.
B)   transaction amounts to a consolidation or merger of the two corporations.
C)   sale is for the fraudulent purpose of avoiding the liabilities of the seller.
D)   All of these.E) None of the above
F) A) and B)

Question 4

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

Accepted Answer

A) True 
 B)False

Question 5

If Jax Corporation and Kaz Corporation combine all of their assets and create a consolidated corporation,Jax Corporation and Kaz Corporation will cease to exist.

Accepted Answer

A) True 
 B)False

Question 6

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

Accepted Answer

Dissolution requires that the corporation devote itself to winding up its affairs and liquidating its assets.After dissolution,the corporation must cease carrying on its business except as is necessary to wind up.When a corporation is dissolved,its assets are liquidated and used first to pay the expenses of liquidation and its creditors according to their respective contract or lien rights.Any remainder is proportionately distributed to shareholders according to their respective contract rights.Statutory provisions governing dissolution and liquidation usually include the following safeguards to the interest of the corporation's creditors: mailing of notice to known creditors,general publication of notice,and preservation of claims against the corporation.

Question 7

A corporation must notify the shareholders of the existence of dissenters' rights before taking the vote on the corporate action.

Accepted Answer

A) True 
 B)False  True

Question 8

If Able Corporation purchases all of the stock of Beta Corporation rather than all of its assets,there is now a change in Beta Corporation's legal status.

Accepted Answer

A) True 
 B)False

Question 9

The Action Corporation and the Braker Corporation combine to form the Cable Corporation.This is a merger.

Accepted Answer

A) True 
 B)False

Question 10

AB Corporation consolidates with YZ Corporation to form A-Z Corporation.The debts of AB Corporation are:

Accepted Answer

A)   assumed by the stockholders of AB Corporation.
B)   discharged by the process of consolidation.
C)   assumed by the new corporation.
D)   discharged by the issuance of new stock in A-Z Corporation.E) C) and D)
F) All of the above

Question 11

The Revised Act grants dissenters' rights to:

Accepted Answer

A)   a shareholder when any amendment to the articles of incorporation materially and adversely affects that dissenter's rights regarding his shares.
B)   dissenting shareholders of a corporation leasing substantially all of its assets in the usual course of business.
C)   dissenting shareholders of each corporate party to a short-form merger.
D)   All of these.E) B) and D)
F) None of the above

Question 12

The courts may grant a petition of involuntary dissolution if shareholders:

Accepted Answer

A)   do not approve of fundamental changes of the board.
B)   show that the corporation has not kept adequate records or filed annual reports.
C)   did not receive their dividends.
D)   show that corporate assets are being squandered.E) A) and C)
F) None of the above

Question 13

A short-form merger:

Accepted Answer

A)   is not a merger at all but a form of consolidation.
B)   may be undertaken only with the subsidiary's directors' approval.
C)   allows no appraisal rights for the parent's minority shareholders.
D)   requires shareholder approval.E) A) and C)
F) B) and C) C

Question 14

A corporation may accomplish acquiring all or substantially all assets of another corporation by:

Accepted Answer

A)   purchase or lease of the other corporations' assets.
B)   purchase of a controlling stock interest in other corporations.
C)   merger or consolidation with other corporations.
D)   All of these.E) B) and D)
F) A) and C)

Question 15

The consolidation of AB Corporation and YZ Corporation requires the affirmative majority vote of:

Accepted Answer

A)   the boards of directors and shareholders of both corporations.
B)   the boards of directors of both corporations,but not the shareholders.
C)   the shareholders of both corporations,but not the boards of directors.
D)   the directors and shareholders of one of the corporations,but not both corporations.E) B) and D)
F) All of the above

Question 16

The state,a shareholder,or a creditor may bring a proceeding seeking judicial dissolution.

Accepted Answer

A) True 
 B)False

Question 17

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

Accepted Answer

A) True 
 B)False

Question 18

The state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

Accepted Answer

A) True 
 B)False

Question 19

Once a corporation becomes publicly held,it cannot return to being private.

Accepted Answer

A) True 
 B)False

Question 20

The 2002 amendments to the Revised Act provide for procedures permitting:

Accepted Answer

A)   a corporation to change its state of incorporation.
B)   a domestic business corporation to become a domestic or foreign partnership or LLC.
C)   Both of these.
D)   Neither of these.E) All of the above
F) C) and D)

Exam 36: Fundamental Changes

A compulsory share exchange:

Correct Answer
verified

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

Correct Answer
verified

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

Correct Answer
verified

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

Correct Answer
verified

If Jax Corporation and Kaz Corporation combine all of their assets and create a consolidated corporation,Jax Corporation and Kaz Corporation will cease to exist.

Correct Answer
verified

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

A corporation must notify the shareholders of the existence of dissenters' rights before taking the vote on the corporate action.

Correct Answer
verified
True

If Able Corporation purchases all of the stock of Beta Corporation rather than all of its assets,there is now a change in Beta Corporation's legal status.

Correct Answer
verified

The Action Corporation and the Braker Corporation combine to form the Cable Corporation.This is a merger.

Correct Answer
verified

AB Corporation consolidates with YZ Corporation to form A-Z Corporation.The debts of AB Corporation are:

Correct Answer
verified

The Revised Act grants dissenters' rights to:

Correct Answer
verified

The courts may grant a petition of involuntary dissolution if shareholders:

Correct Answer
verified

A short-form merger:

Correct Answer
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C

A corporation may accomplish acquiring all or substantially all assets of another corporation by:

Correct Answer
verified

The consolidation of AB Corporation and YZ Corporation requires the affirmative majority vote of:

Correct Answer
verified

The state,a shareholder,or a creditor may bring a proceeding seeking judicial dissolution.

Correct Answer
verified

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

Correct Answer
verified

The state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

Correct Answer
verified

Once a corporation becomes publicly held,it cannot return to being private.

Correct Answer
verified

The 2002 amendments to the Revised Act provide for procedures permitting:

Correct Answer
verified

Exam 36: Fundamental Changes

A compulsory share exchange:

Correct AnswerverifiedShow Answer

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

Correct AnswerverifiedShow Answer

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

Correct AnswerverifiedShow Answer

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

Correct AnswerverifiedShow Answer

If Jax Corporation and Kaz Corporation combine all of their assets and create a consolidated corporation,Jax Corporation and Kaz Corporation will cease to exist.

Correct AnswerverifiedShow Answer

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

A corporation must notify the shareholders of the existence of dissenters' rights before taking the vote on the corporate action.

Correct AnswerverifiedTrue

If Able Corporation purchases all of the stock of Beta Corporation rather than all of its assets,there is now a change in Beta Corporation's legal status.

Correct AnswerverifiedShow Answer

The Action Corporation and the Braker Corporation combine to form the Cable Corporation.This is a merger.

Correct AnswerverifiedShow Answer

AB Corporation consolidates with YZ Corporation to form A-Z Corporation.The debts of AB Corporation are:

Correct AnswerverifiedShow Answer

The Revised Act grants dissenters' rights to:

Correct AnswerverifiedShow Answer

The courts may grant a petition of involuntary dissolution if shareholders:

Correct AnswerverifiedShow Answer

A short-form merger:

Correct AnswerverifiedC

A corporation may accomplish acquiring all or substantially all assets of another corporation by:

Correct AnswerverifiedShow Answer

The consolidation of AB Corporation and YZ Corporation requires the affirmative majority vote of:

Correct AnswerverifiedShow Answer

The state,a shareholder,or a creditor may bring a proceeding seeking judicial dissolution.

Correct AnswerverifiedShow Answer

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

Correct AnswerverifiedShow Answer

The state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

Correct AnswerverifiedShow Answer

Once a corporation becomes publicly held,it cannot return to being private.

Correct AnswerverifiedShow Answer

The 2002 amendments to the Revised Act provide for procedures permitting:

Correct AnswerverifiedShow Answer

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True

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C

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