CO Bar CO Bar Business Organizations 2

Question 1

Under Colorado agency law, an agent acting with apparent authority binds the principal when:

Accepted Answer

The principal's conduct causes a third party to reasonably believe the agent has authority

Answer

The agent subjectively believes they have authority

Answer

The agent has a written contract with the third party

Answer

The principal later ratifies the agent's act

Question 2

In Colorado, a general partner in a limited partnership is personally liable for partnership debts, while limited partners:

Accepted Answer

Have liability limited to their capital contribution so long as they do not participate in management beyond safe harbors

Answer

Are always personally liable for all debts

Answer

Are personally liable only for debts they personally guarantee

Answer

Have no liability whatsoever under any circumstances

Question 3

Under the Colorado Business Corporation Act, cumulative voting for directors, if permitted, allows minority shareholders to:

Accepted Answer

Multiply their shares by the number of directors being elected and concentrate all votes on one candidate

Answer

Vote their shares multiple times per election

Answer

Require a supermajority to elect any director

Answer

Elect directors only from a pre-approved slate

Question 4

A shareholder derivative suit in Colorado is brought by a shareholder:

Accepted Answer

On behalf of the corporation to enforce corporate rights when the board wrongfully refuses to act

Answer

To enforce the shareholder's personal claims against the corporation

Answer

To dissolve the corporation involuntarily

Answer

To obtain a dividend the board refused to declare

Question 5

Under Colorado law, a statutory merger requires approval by:

Accepted Answer

A majority of the board and a majority of outstanding shares of each merging entity, absent a higher threshold in articles

Answer

Only the board of directors of each merging entity

Answer

A supermajority of creditors

Answer

The Colorado Secretary of State prior to board vote

Question 6

In Colorado, a director's duty of loyalty prohibits the director from:

Accepted Answer

Usurping a business opportunity that belongs to the corporation without disclosure and approval

Answer

Making business decisions that turn out to be unprofitable

Answer

Taking a salary from the corporation

Answer

Hiring a relative as an employee at fair market wages