MA Bar Business Associations 2

Question 1

Under Massachusetts corporate law, shareholders generally have the right to vote on which of the following matters?

Accepted Answer

Fundamental corporate changes such as mergers, amendments to the articles, and dissolution

Answer

Day-to-day operational decisions such as vendor contracts and staffing

Answer

Vetoing any decision made by the board of directors with a majority vote

Answer

Inspecting all confidential trade secrets and proprietary business plans upon demand

Question 2

Which of the following best describes an 'ultra vires' act by a Massachusetts corporation?

Accepted Answer

An act that exceeds the authority granted in the corporation's articles of organization or by law

Answer

An act performed by a corporate officer without prior board of directors approval

Answer

An act by the board that harms a minority shareholder's economic interests

Answer

An act performed during a period when the corporation's annual report is overdue

Question 3

Under the Massachusetts Uniform Partnership Act, when a general partnership is dissolved, which of the following correctly describes what occurs?

Accepted Answer

A winding-up process is triggered, during which the partnership continues to exist to settle its affairs before termination

Answer

The partnership automatically ceases to exist upon the triggering event

Answer

The partnership requires immediate court-supervised liquidation

Answer

Court approval is required before partners may distribute any assets to themselves

Question 4

Under agency law, an agent has 'apparent authority' to bind a principal when:

Accepted Answer

The principal's conduct causes a third party to reasonably believe the agent is authorized

Answer

The agent genuinely and honestly believes they have authority to act on the principal's behalf

Answer

The agent has received express written authorization from the principal in advance

Answer

The agent acts consistently with a prior course of dealing between the parties

Question 5

A minority shareholder in a Massachusetts close corporation claims majority shareholders are freezing her out of management and refusing to declare dividends. Her most appropriate remedy is likely:

Accepted Answer

Seeking judicial dissolution or a court-ordered buyout under Massachusetts's close corporation protections

Answer

Filing a derivative suit on behalf of the corporation against the majority shareholders

Answer

Suing the majority shareholders for breach of the implied covenant of good faith in an employment contract

Answer

Petitioning the court to appoint a permanent receiver to manage the corporation's daily affairs

Question 6

Under the Massachusetts LLC Act, if an LLC does not have an operating agreement specifying a management structure, the LLC defaults to being:

Accepted Answer

Member-managed, with all members having equal rights in the conduct of LLC business

Answer

Manager-managed, with managers appointed by the Secretary of State upon formation

Answer

Automatically dissolved due to the failure to adopt a required operating agreement

Answer

Required to adopt a governance structure identical to that of a Massachusetts corporation

Question 7

In a Massachusetts limited partnership governed by MRULPA, which statement correctly describes a limited partner's personal liability?

Accepted Answer

Limited partners are shielded from personal liability for partnership debts regardless of their participation in management

Answer

Limited partners have the same unlimited personal liability as general partners

Answer

Limited partners become personally liable for partnership debts if they participate in management

Answer

Limited partners may never share in the profits of a limited partnership