CGA CGA Business Law & Governance 2

Question 1

What is the legal concept of 'piercing the corporate veil'?

Accepted Answer

Holding shareholders personally liable for corporate obligations in cases of abuse

Answer

Disclosing confidential corporate information to regulators

Answer

Dissolving a corporation through bankruptcy

Answer

Merging two corporations into one entity

Question 2

Under corporate governance best practices, what is the recommended composition of an audit committee?

Accepted Answer

Comprised of independent, financially literate outside directors

Answer

Composed entirely of executive officers

Answer

Led by the CFO to ensure financial expertise

Answer

At least half must be company employees

Question 3

Which of the following is a characteristic of a general partnership under US law?

Accepted Answer

Each partner has unlimited personal liability for all partnership obligations

Answer

Partners have limited liability for partnership debts

Answer

Partners are only liable up to their capital contributions

Answer

The partnership must register with the SEC

Question 4

The business judgment rule protects corporate directors from liability when they:

Accepted Answer

Make informed business decisions in good faith without personal conflict

Answer

Act in self-interest when making decisions

Answer

Delegate all decisions to officers without oversight

Answer

Fail to attend board meetings regularly

Question 5

Which federal law primarily governs employee retirement benefit plans and imposes fiduciary duties on plan administrators?

Accepted Answer

ERISA (Employee Retirement Income Security Act)

Answer

FLSA (Fair Labor Standards Act)

Answer

COBRA (Consolidated Omnibus Budget Reconciliation Act)

Answer

HIPAA (Health Insurance Portability and Accountability Act)

Question 6

Under contract law, what is 'promissory estoppel'?

Accepted Answer

A doctrine enforcing a promise when a party reasonably relied on it to their detriment

Answer

A clause preventing parties from making future promises

Answer

A requirement to put all promises in writing

Answer

A defense allowing parties to escape unfair contracts