MD Bar MD Bar Business Organizations 2

Question 1

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

Accepted Answer

Two-thirds of all votes entitled to be cast

Answer

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.

Question 2

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

Accepted Answer

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

Answer

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.

Question 3

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

Accepted Answer

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

Answer

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.

Question 4

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

Accepted Answer

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

Answer

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.

Question 5

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

Accepted Answer

Member-managed

Answer

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

(MD Bar) Maryland Bar Exam Practice Test

(MD Bar) Maryland Bar Exam Practice Test

MD Bar MD Bar Business Organizations 2