MD Bar Business Organizations Flashcards

Under Maryland's General Corporation Law, what is the default voting threshold required to approve a merger?

Answer: Two-thirds of all votes entitled to be cast

Maryland's General Corporation Law requires approval by two-thirds of all votes entitled to be cast for a merger, unless the charter provides otherwise.

In Maryland, 'piercing the corporate veil' refers to:

Answer: A court imposing personal liability on shareholders for corporate debts when the corporate form is abused

Piercing the corporate veil allows courts to hold shareholders personally liable for corporate obligations when the corporate form is used to perpetrate fraud or injustice.

A closely held Maryland corporation is primarily distinguished from a publicly traded corporation because:

Answer: Its shares are not publicly traded and it typically has a small number of shareholders

A closely held corporation is characterized by shares not traded on public markets and a limited number of shareholders who often also manage the business.

In Maryland, which of the following best describes a shareholder derivative suit?

Answer: A shareholder suing on behalf of the corporation for harm done to the corporation that it has failed to pursue

A derivative suit is brought by a shareholder as a representative of the corporation when the corporation has failed to pursue a valid legal claim on its own behalf.

Under the Maryland Limited Liability Company Act, what is the default management structure of an LLC?

Answer: Member-managed

Under Maryland law, an LLC is member-managed by default unless the operating agreement specifies that it will be manager-managed.

In Maryland, which statement about corporate dissolution is TRUE?

Answer: Dissolution may be voluntary (by shareholder action) or involuntary (by court order)

Maryland corporations may be dissolved voluntarily through shareholder action or involuntarily through a court order for specified statutory grounds.