Business and Corporate Law Flashcards
7 cards from real CLA/CP Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Business and Corporate Law flashcards as text
Under the Statute of Frauds, which of the following contracts MUST be in writing to be enforceable?
Answer: A contract for the sale of goods worth $600
The UCC requires contracts for the sale of goods of $500 or more to be evidenced by a signed writing.
The business judgment rule protects corporate directors from liability for their decisions when the director:
Answer: Acts on an informed basis, in good faith, and in the honest belief the action is in corporate interests
The business judgment rule shields directors who act in good faith, on an informed basis, in the honest belief it serves the corporation's best interests.
When one corporation acquires another through a 'merger,' what happens to the acquired company?
Answer: It ceases to exist as its assets and liabilities are absorbed by the surviving entity
In a statutory merger, the acquired corporation is extinguished and the surviving corporation assumes all its assets and liabilities.
A principal who approves an unauthorized act that an agent already performed is said to have:
Answer: Ratified the agent's act
Ratification occurs when a principal expressly or impliedly confirms an agent's previously unauthorized act, making it binding.
A 'buy-sell agreement' between shareholders of a closely held corporation is typically used to:
Answer: Control the transfer of shares and provide exit mechanisms for owners
Buy-sell agreements govern what happens when a shareholder wants to leave, dies, or becomes disabled, preventing unwanted outside parties from acquiring shares.
An employee who causes harm to a customer while performing job duties within the scope of employment creates liability for the employer under which doctrine?
Answer: Respondeat superior
Respondeat superior holds employers vicariously liable for employees' tortious acts committed within the scope of employment.
Which of the following is a distinguishing feature of a 'C corporation' compared to an 'S corporation'?
Answer: C corporations are subject to double taxation on income
C corporations are taxed at the entity level, and shareholders are taxed again on dividends received, resulting in double taxation.