GA Bar Business Organizations Flashcards

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

Answer: Simple majority of shares entitled to vote

Georgia law requires approval of a merger by a majority of shares entitled to vote, unless the articles require a higher threshold.

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

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

The business judgment rule presumes Georgia directors acted on an informed basis, in good faith, and in the honest belief the action was in the corporation's best interest.

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

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

Georgia courts pierce the corporate veil when the corporation is used as a mere alter ego or instrumentality of a shareholder to commit fraud or evade legal obligations.

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

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

A limited partner's personal liability is limited to the amount of their capital contribution, provided they do not participate in control of the business.

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

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

In a member-managed Georgia LLC, each member is an agent of the LLC and may bind it with respect to acts in the ordinary course of business.

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

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

Georgia law prohibits distributions that would render the corporation insolvent or that would make total liabilities exceed total assets.