Question 1

If a shareholder borrows money and delivers stock as collateral security, the creditor has a perfected security interest in the stock without any filing by the creditor.

Accepted Answer

A) True 
 B)False  True

Question 2

Shareholders exercise direct control over their corporation.

Accepted Answer

A) True 
 B)False

Question 3

To correctly transfer shares of stock, a delivery from the owner of the shares directly to the transferee is required.

Accepted Answer

A) True 
 B)False

Question 4

Under the RMBCA, a preincorporation subscription agreement is irrevocable for six (6) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation.

Accepted Answer

A) True 
 B)False  True

Question 5

Because corporate stock has the quality of negotiability:

Accepted Answer

A)   it is considered commercial paper.
B)   it is governed by Article 3 of the UCC.
C)   it is in agreement with common law principles.
D)   many defenses cannot be raised against a person acquiring the certificate in good faith and for value.E) A) and D)
F) B) and D)

Question 6

A contract or agreement to purchase a specific number and kind of shares of stock when it is issued is called a stock:

Accepted Answer

A)   guaranty.
B)   warranty.
C)   request.
D)   subscription.E) A) and D)
F) B) and C)

Question 7

A shareholder has a right to inspect the books of the shareholder's corporation if:

Accepted Answer

A)   the request is made in good faith.
B)   the request is made with proper motives.
C)   the inspection takes place at a reasonable time and place.
D)   all of the above.E) B) and C)
F) A) and B)

Question 8

Ownership of shares of stock may be transferred by any of the following methods except:

Accepted Answer

A)   delivery of the stock endorsed by its owner in blank.
B)   delivery of a notice of intent to transfer.
C)   delivery of the stock endorsed by its owner to a specified person.
D)   delivery of the certificate and a separate power of attorney executed by the owner.E) C) and D)
F) All of the above

Question 9

A shareholder does not:

Accepted Answer

A)   qualify as a member of the corporation.
B)   own any specific property of the corporation.
C)   have a fractional interest in the total property of the corporation.
D)   all of the above.E) All of the above
F) A) and B)

Question 10

Preferred stock is ordinarily nonvoting stock.

Accepted Answer

A) True 
 B)False

Question 11

Donna called her stockbroker Henry and told him to purchase 300 shares of Royex Corporation shares at $15 per share, the current market price. Henry agreed to do so, but became distracted and failed to do so. The price of the shares rose $3 in price that day. In the evening, Donna in a telephone conversation agreed to sell 300 shares of Royex to Sid. Assuming Henry and Donna dispute the validity of the contracts, which of the contracts are enforceable in court?

Accepted Answer

A contract for the sale of corporate sec...

Question 12

Each shareholder owns a proportionate share of the property of the corporation.

Accepted Answer

A) True 
 B)False

Question 13

Delivering stock to a creditor as security for a debt owed by the shareholder:

Accepted Answer

A)   transfers ownership rights.
B)   gives rise to a perfected security interest.
C)   makes the creditor a perfected party after filing.
D)   makes the debtor a perfected party after filing.E) A) and D)
F) A) and C)

Question 14

Shares of stock may not be acquired through subscription but may be acquired through a transfer of existing shares from a shareholder or from the corporation.

Accepted Answer

A) True 
 B)False

Question 15

Preferred stock cannot have priority over common stock with respect to dividends.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is not true of common stock?

Accepted Answer

A)   It is ordinary stock that has no preferences.
B)   It entitles the holder to share in corporate profits in the form of dividends.
C)   It entitles the holder to participate in the distribution of capital upon dissolution.
D)   It is ordinarily nonvoting.E) A) and C)
F) A) and B)

Question 17

A bona fide purchaser of stock is shielded from the claim that the transfer was made in violation of a transfer restriction that was unknown to the purchaser and that was not noted conspicuously on the certificate.

Accepted Answer

A) True 
 B)False

Question 18

Ordinarily, each shareholder is entitled to one vote for each voting share.

Accepted Answer

A) True 
 B)False  True

Question 19

Which of the following is not a factor that may lead to "piercing the corporate veil" and imposing liability on corporate owners (shareholders) ?

Accepted Answer

A)   grossly inadequate capitalization of the corporation
B)   formation of the corporation to avoid personal liability for business obligations
C)   formation of the corporation to perpetuate a fraud or conceal illegality
D)   shareholder diversion of corporate funds or assetsE) B) and D)
F) A) and D)

Question 20

Straight voting:

Accepted Answer

A)   increases the voting power of minority shareholders.
B)   is the normal method for shareholder voting on corporate matters.
C)   restricts each shareholder to one vote, regardless of the number of shares owned.
D)   all of the above.E) A) and B)
F) B) and C)

Exam 45: Shareholder Rights in Corporations

If a shareholder borrows money and delivers stock as collateral security, the creditor has a perfected security interest in the stock without any filing by the creditor.

Correct Answer
verified
True

Shareholders exercise direct control over their corporation.

Correct Answer
verified

To correctly transfer shares of stock, a delivery from the owner of the shares directly to the transferee is required.

Correct Answer
verified

Under the RMBCA, a preincorporation subscription agreement is irrevocable for six (6) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation.

Correct Answer
verified
True

Because corporate stock has the quality of negotiability:

Correct Answer
verified

A contract or agreement to purchase a specific number and kind of shares of stock when it is issued is called a stock:

Correct Answer
verified

A shareholder has a right to inspect the books of the shareholder's corporation if:

Correct Answer
verified

Ownership of shares of stock may be transferred by any of the following methods except:

Correct Answer
verified

A shareholder does not:

Correct Answer
verified

Preferred stock is ordinarily nonvoting stock.

Correct Answer
verified

Correct Answer
verified
A contract for the sale of corporate sec...
View Answer

Each shareholder owns a proportionate share of the property of the corporation.

Correct Answer
verified

Delivering stock to a creditor as security for a debt owed by the shareholder:

Correct Answer
verified

Shares of stock may not be acquired through subscription but may be acquired through a transfer of existing shares from a shareholder or from the corporation.

Correct Answer
verified

Preferred stock cannot have priority over common stock with respect to dividends.

Correct Answer
verified

Which of the following statements is not true of common stock?

Correct Answer
verified

A bona fide purchaser of stock is shielded from the claim that the transfer was made in violation of a transfer restriction that was unknown to the purchaser and that was not noted conspicuously on the certificate.

Correct Answer
verified

Ordinarily, each shareholder is entitled to one vote for each voting share.

Correct Answer
verified
True

Which of the following is not a factor that may lead to "piercing the corporate veil" and imposing liability on corporate owners (shareholders) ?

Correct Answer
verified

Straight voting:

Correct Answer
verified

Exam 45: Shareholder Rights in Corporations

If a shareholder borrows money and delivers stock as collateral security, the creditor has a perfected security interest in the stock without any filing by the creditor.

Correct AnswerverifiedTrue

Shareholders exercise direct control over their corporation.

Correct AnswerverifiedShow Answer

To correctly transfer shares of stock, a delivery from the owner of the shares directly to the transferee is required.

Correct AnswerverifiedShow Answer

Under the RMBCA, a preincorporation subscription agreement is irrevocable for six (6) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation.

Correct AnswerverifiedTrue

Because corporate stock has the quality of negotiability:

Correct AnswerverifiedShow Answer

A contract or agreement to purchase a specific number and kind of shares of stock when it is issued is called a stock:

Correct AnswerverifiedShow Answer

A shareholder has a right to inspect the books of the shareholder's corporation if:

Correct AnswerverifiedShow Answer

Ownership of shares of stock may be transferred by any of the following methods except:

Correct AnswerverifiedShow Answer

A shareholder does not:

Correct AnswerverifiedShow Answer

Preferred stock is ordinarily nonvoting stock.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA contract for the sale of corporate sec...View AnswerShow Answer

Each shareholder owns a proportionate share of the property of the corporation.

Correct AnswerverifiedShow Answer

Delivering stock to a creditor as security for a debt owed by the shareholder:

Correct AnswerverifiedShow Answer

Shares of stock may not be acquired through subscription but may be acquired through a transfer of existing shares from a shareholder or from the corporation.

Correct AnswerverifiedShow Answer

Preferred stock cannot have priority over common stock with respect to dividends.

Correct AnswerverifiedShow Answer

Which of the following statements is not true of common stock?

Correct AnswerverifiedShow Answer

A bona fide purchaser of stock is shielded from the claim that the transfer was made in violation of a transfer restriction that was unknown to the purchaser and that was not noted conspicuously on the certificate.

Correct AnswerverifiedShow Answer

Ordinarily, each shareholder is entitled to one vote for each voting share.

Correct AnswerverifiedTrue

Which of the following is not a factor that may lead to "piercing the corporate veil" and imposing liability on corporate owners (shareholders) ?

Correct AnswerverifiedShow Answer

Straight voting:

Correct AnswerverifiedShow Answer

Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A contract for the sale of corporate sec...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
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Correct Answer
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