.. hip after giving six-month’s notice to each general partner. 15.Mitch is a limited partner in a limited partnership. He discovers that the general partners have failed to file a certificate of limited partnership. What should Mitch do? 16. The legal existence of a corporation is unaffected by the death of all of its shareholders.
T/F 17.Harger Corporation, a Tennessee Corporation, owns a factory in Indiana. It sells its products in Tennessee, Kentucky, and Indiana. It maintains a sales office in Madison, Indiana for the purpose of making contracts, coordinating deliveries of its products, keeping a record of sales and deliveries, and paying salaries. Is the Harger Company required to qualify to do business in Indiana? 18. Any inconsistency between a corporation’s bylaws and its articles of incorporation is decided in favor of the articles of incorporation.
T/F 19. A corporation’s articles of incorporation must include: A) The duration of the corporation. B) The initial directors of the corporation. C) The purpose of the corporation. D) The number of shares the corporation is authorized to issue.
20.Lyle and Eric are the only shareholders of LA Morte Corporation. Each owns 500 shares of the corporation. They are concerned about the free transferability of their shares if one of them wants to sell his shares and the lack of free transferability if one of them dies, retires, or becomes disabled. What share transfer restrictions address their concerns? 21. Modern corporation statutes permit a corporation to do anything an individual may do.
T/F 22. Today ultra vires is legal doctrine of small importance for all of the following: A) Statutes have eliminated ultra vires as a defense in contract litigation between the parties to the contract. B) Shareholders may not assert ultra vires as a grounds to enjoin a corporation from executing a proposed action. C) Misuse of the ultra vires doctrine has led to its near abandonment. D) Corporation’s purpose clauses are broadly written. 23.Telenex Corporation is a competitor of Distanet Corporation in the personal computer market.
After examining past and future price and sales data and consulting an economist and an accountant, the directors of Distanet Corporation vote to reduce the price of their computers, believing that by reducing the price of their products the corporation will compete more successfully with Telenex Corporation. Aileen, a stockholder of the Distanet Corporation, brings an action to enjoin the directors from putting the price-cutting policy in operation. Aileen contends that if the policy is followed the corporation will lose money. Will the court grant the injunction? 24. Ordinarily, a merger of two corporations must be approved only by the shareholders of the corporation that does not survive the merger. T/F 25.
Which of the following is incorrect concerning a shareholder voting agreement? A) A shareholder voting agreement may be kept secret from shareholders who are not a party to the agreement. B) When a shareholder refuses to vote as the shareholder voting agreement provides, a court will specifically enforce the agreement. C) A shareholder voting agreement is limited in duration to 10 years, but shareholders may extend the agreement for another 10 years. D) A share holder voting agreement must be written. 26.Gussie, a shareholder of Mitty, Inc., asks the board of directors to sue 10 of its 15 directors who she alleges have looted the corporation over the last three years. The board of directors would like not to sue the 10 alleged wrongdoers. What procedures should the board follow to ensure that Gussie cannot bring a derivative suit? 27.
The primary purpose of the Securities act of 1933 is to require public issuers of equity securities to make continual disclosures of material facts to investors to allwo themto make informed purchase and sale decisions. T/F 28. 29.Carefree Estates, Inc., is building, selling, and managing a large resort condominium project in the mountains of Colorado. It uses magazine advertisements and direct-mail brochures to promote sales of the condos to people all over the United States. This material is lavishly illustrated and states that the condos are sound investments because there is a high rental demand by vacationers for the properties.
A buyer of a condo gets to use the condominium for no more than two weeks per year. Carefree serves as the rental agent for finding tenants for the rest of the year. Net proceeds from the rentals of all the condos is combined and then pro-rated to the condo buyers on the basis of the purchase price of their units. Is Carefree selling securities under the Securities Act of 1933? What is the effect of their being securities? 30. A citizen of the United States may use the Freedom of Information Act to obtain any document held by an administrative agency. T/F 31. 32.The State of Illiana has a statute authorizing the Illiana Drug Enforcement Administration (IDEA) to conduct warrantless searches of students’ room in college dormitories.
The statute was enacted to aid the IDEA’s effort to discover drugs in places where the Illiana legislature believes illegal drugs are stored and sold. Pursuant to Crackhead’s dormitory room at a private university, Wossamatta University, The agents find three kilograms of cocaine. At his trial for trafficking (i.e., order that the seized cocaine cannot be used a evidence), Will the court suppress the evidence? Why or why not? 33. The original purpose of the Truth in Lending Act was to protect creditors who extend credit to consumers. 34.
35.What are three duties imposed by the Fair Credit Reporting Act on consumer reporting agencies? T/F 36. Agreements to fix maximum prices are given rule of reason treatment by courts. T/F 37. The federal government’s horizontal merger guidelines do not allow the Justice Department and the Federal Trade Commission to consider economic efficiency arguments in deciding whether to challenge a merger as a possible violation of Section 7 of the Clayton Act. T/F 38.
39. Employees are gauranteed the right to organize under the National Labor Relations act. T/F 40. 41. Under Superfund, the EPA may clean up a contaminated site and recover its costs from a person responsible for the contamination.
T/F 42. 43. GATT is intended to assist nations in protecting their industries from ruinous foreign competition. T/F 44. Counterfeit goods are: A) Goods lawfully bearing trademarks but entering the American market illegally.
B) Goods in some way economically supported by the government of their country of origin. C) Goods unlawfully bearing a trademark. D) Goods sold a unfairly low prices.