Question 1

Shareholders exercise direct control over their corporation.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

Pursuant to the __________ theory, when a corporation is so dominated and controlled by a single shareholder that the separate personalities of the shareholder and the corporation no longer exist, courts will ignore the corporate entity and hold the shareholder personally liable.

Accepted Answer

A)   alter ego
B)   altered states
C)   limited liability
D)   business judgment A

Question 4

If Bob owns 100 shares of stock for which he paid $1,000 to the corporation, the _______ would be $10 per share.

Accepted Answer

A)   par value
B)   book value
C)   market value
D)   capital value

Question 5

The two most common instruments used to provide the capital structure of a corporation are stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 6

Until a transfer is recorded on its books, a corporation is entitled to treat the person whose name is on its books as the owner of its stock.

Accepted Answer

A) True 
 B)False

Question 7

An interest in a corporation is based on the ownership of one or more shares of stock of the corporation.

Accepted Answer

A) True 
 B)False

Question 8

Each shareholder has an absolute right to annual dividends.

Accepted Answer

A) True 
 B)False

Question 9

Restrictions on the transfer of stock are always valid.

Accepted Answer

A) True 
 B)False

Question 10

Another term for par value is book value.

Accepted Answer

A) True 
 B)False  False

Question 11

A wasting asset corporation is designed to exhaust the assets of the corporation.

Accepted Answer

A) True 
 B)False

Question 12

Dividends are payable in any of the following ways except:

Accepted Answer

A)   money.
B)   products manufactured by the corporation.
C)   shares of other corporations held by the corporation.
D)   corporate property

Question 13

Corporate securities evidenced by a certificate are negotiable.

Accepted Answer

A) True 
 B)False

Question 14

Outstanding shares of stock have been issued to stockholders.

Accepted Answer

A) True 
 B)False  True

Question 15

Under the RMBCA, a preincorporation subscription agreement is irrevocable for three (3) 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

Question 16

A shareholder may make an absolute transfer of stock or may transfer it merely as collateral to secure the payment of a debt.

Accepted Answer

A) True 
 B)False

Question 17

A preincorporation subscription to stock is generally treated as an agreement to buy the stock when the corporation is formed.

Accepted Answer

A) True 
 B)False

Question 18

Common stock cannot has priority over preferred stock with respect to dividends.

Accepted Answer

A) True 
 B)False

Question 19

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.

Question 20

If Bruce signs an agreement to purchase Joe's shares in ABCo. the stock sales contract is called an indenture.

Accepted Answer

A) True 
 B)False

Exam 44: Shareholder Rights in Corporations

Shareholders exercise direct control over their corporation.

Correct AnswerverifiedShow Answer

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 AnswerverifiedShow Answer

Pursuant to the __________ theory, when a corporation is so dominated and controlled by a single shareholder that the separate personalities of the shareholder and the corporation no longer exist, courts will ignore the corporate entity and hold the shareholder personally liable.

Correct AnswerverifiedA

If Bob owns 100 shares of stock for which he paid $1,000 to the corporation, the _______ would be $10 per share.

Correct AnswerverifiedShow Answer

The two most common instruments used to provide the capital structure of a corporation are stocks and bonds.

Correct AnswerverifiedShow Answer

Until a transfer is recorded on its books, a corporation is entitled to treat the person whose name is on its books as the owner of its stock.

Correct AnswerverifiedShow Answer

An interest in a corporation is based on the ownership of one or more shares of stock of the corporation.

Correct AnswerverifiedShow Answer

Each shareholder has an absolute right to annual dividends.

Correct AnswerverifiedShow Answer

Restrictions on the transfer of stock are always valid.

Correct AnswerverifiedShow Answer

Another term for par value is book value.

Correct AnswerverifiedFalse

A wasting asset corporation is designed to exhaust the assets of the corporation.

Correct AnswerverifiedShow Answer

Dividends are payable in any of the following ways except:

Correct AnswerverifiedShow Answer

Corporate securities evidenced by a certificate are negotiable.

Correct AnswerverifiedShow Answer

Outstanding shares of stock have been issued to stockholders.

Correct AnswerverifiedTrue

Under the RMBCA, a preincorporation subscription agreement is irrevocable for three (3) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation.

Correct AnswerverifiedShow Answer

A shareholder may make an absolute transfer of stock or may transfer it merely as collateral to secure the payment of a debt.

Correct AnswerverifiedShow Answer

A preincorporation subscription to stock is generally treated as an agreement to buy the stock when the corporation is formed.

Correct AnswerverifiedShow Answer

Common stock cannot has priority over preferred stock with respect to dividends.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If Bruce signs an agreement to purchase Joe's shares in ABCo. the stock sales contract is called an indenture.

Correct AnswerverifiedShow Answer

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A

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False

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