MN Bar Business Organizations and Corporations 2

Question 1

Under Minnesota corporate law, shareholders in a closely held corporation may bring a derivative action when:

Accepted Answer

The board refuses to sue on behalf of the corporation after a demand or demand is excused

Answer

A derivative action in Minnesota requires a shareholder to first make a demand on the board (or show demand futility) before filing suit to enforce the corporation's rights.

Question 2

Under the Minnesota Business Corporation Act, a shareholder may inspect corporate books and records upon:

Accepted Answer

Making a written demand describing the shareholder's purpose

Answer

Under Minn. Stat. § 302A.461, shareholders have inspection rights upon written demand that describes a proper purpose for the inspection.

Question 3

Under the Minnesota Business Corporation Act, the duty of loyalty requires directors to:

Accepted Answer

Subordinate their personal interests to those of the corporation when conflicts arise

Answer

The duty of loyalty requires directors to put the corporation's interests ahead of their own personal interests when conflicts arise, and to deal fairly in self-interest transactions.

Question 4

In Minnesota, which event triggers a shareholder's right to dissent and seek payment of fair value for their shares (appraisal rights)?

Accepted Answer

Certain fundamental corporate changes such as a merger or sale of substantially all assets

Answer

Under Minn. Stat. § 302A.471, appraisal rights arise upon fundamental changes such as mergers, plan of exchange, or sale of substantially all assets not in the ordinary course of business.

Question 5

Under Minnesota law, an agent acting within the scope of their actual authority binds the principal because:

Accepted Answer

The principal expressly or impliedly authorized the specific act

Answer

Actual authority — express or implied — arises from the principal's manifestations to the agent that the agent is authorized to act, making the principal bound by acts within that authority.

MN Bar - Minnesota Bar Exam Practice Test

MN Bar - Minnesota Bar Exam Practice Test

MN Bar Business Organizations and Corporations 2