GA Bar GA Bar Business Organizations

Question 1

Under the Georgia Business Corporation Code, what is the default voting threshold required to approve a merger for a domestic corporation?

Accepted Answer

Simple majority of shares entitled to vote

Answer

Two-thirds of shares entitled to vote

Answer

Unanimous consent of all shareholders

Answer

Three-fourths of shares entitled to vote

Question 2

In Georgia, which of the following best describes the 'business judgment rule' as applied to corporate directors?

Accepted Answer

Directors are presumed to have acted in good faith and in the best interest of the corporation

Answer

Directors are personally liable for any business decision that results in a loss

Answer

Directors must prove the reasonableness of every business decision

Answer

Directors are liable unless approved by a unanimous board vote

Question 3

Under Georgia law, when may a court pierce the corporate veil and hold shareholders personally liable?

Accepted Answer

When the corporate form is used to perpetrate fraud or is a mere instrumentality of a shareholder

Answer

Whenever the corporation is insolvent

Answer

Whenever the corporation fails to hold annual meetings

Answer

When the corporation has fewer than three shareholders

Question 4

Under the Georgia Revised Uniform Limited Partnership Act, what is the default liability rule for a limited partner?

Accepted Answer

A limited partner's liability is limited to their capital contribution

Answer

A limited partner is personally liable for all partnership debts

Answer

A limited partner is liable only for debts incurred after they joined

Answer

A limited partner has the same liability as a general partner

Question 5

Under the Georgia LLC Act, which of the following statements about member-managed LLCs is correct?

Accepted Answer

Any member may bind the LLC in the ordinary course of business

Answer

Only the managing member may bind the LLC under any circumstances

Answer

Members must unanimously approve all ordinary business decisions

Answer

Members have no authority to act as agents of the LLC

Question 6

A Georgia corporation's board of directors wishes to declare a dividend. Under the Georgia Business Corporation Code, which test must be satisfied?

Accepted Answer

The distribution must not render the corporation unable to pay debts as they become due or make total assets less than total liabilities

Answer

The corporation must have retained earnings exceeding par value of all shares

Answer

Dividends require approval of at least two-thirds of shareholders

Answer

Only preferred shareholders may receive dividends without a surplus