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problem 1: The amount received by a corporation for the issue of its shares is referred to as:

a. Authorized capital
b. Stated capital
c. Paid-up capital
d. Issued capital
 
problem 2: This shareholder remedy entitles a shareholder who is opposed to fundamental changes such as the sale of substantially all of a business’s assets to have the corporation buy his or her shares:

a. Dissent and approval
b. Derivative action
c. Winding up
d. Oppression

problem 3: Corporation A was issued a loan by Bank B. Corporation A is now claiming that its Chief Financial Officer did not have the authority to obtain the loan and therefore is refusing to honour the terms of this bank loan. Based on the indoor management rule:

a. Corporation A will not be bound by the loan because the CFO would not normally be involved in a borrowing transaction. 
b. Corporation A will be bound by loan since everything appears to have been done properly in the eyes of Bank B as an outsider.
c. Corporation A will be bound even if there was a restriction on the CFO’s authority to transact loans as long as Bank B did not know about this restriction.
d. Both B and C.
 
problem 4: In the case of a regulatory offence by a corporation involving a serious violation of health and safety legislation, the “guilty mind” in the burden of proof refers to the fact that:

a. There was a directing mind, a person in the corporation with responsibility to establish policy in that area, who failed to do so.
b. The directors did not take all reasonable care.
c. The directors should have known their conduct would result in the commission of an offence. 
d. The directors knew they were committing an offence and did so anyway.

Business Law & Ethics, Finance

  • Category:- Business Law & Ethics
  • Reference No.:- M97147

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