Business Organizations and Corporations Flashcards

Under the Minnesota Business Corporation Act (Minn. Stat. Ch. 302A), the duty of care owed by a director requires the director to act:

Answer: In good faith and in a manner reasonably believed to be in the best interests of the corporation

Under Minn. Stat. § 302A.251, directors must act in good faith, in a manner they reasonably believe to be in the corporation's best interests, and with the care of a person in a like position.

Under Minnesota law, the business judgment rule protects corporate directors from liability for business decisions when:

Answer: The director acted in good faith, was informed, and had no conflicting interest

The Minnesota business judgment rule protects directors who acted in good faith, on an informed basis, and without personal conflict, even if the decision turns out poorly.

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

Answer: When the corporate form is used as a facade for fraud or injustice and there is unity of interest between the corporation and shareholder

Minnesota courts pierce the corporate veil when the corporate form is used to perpetrate fraud or achieve injustice, and there is such unity of interest that the corporation is merely an alter ego of the shareholder.

Under the Minnesota Revised Uniform Limited Liability Company Act, members of an LLC are generally:

Answer: Not personally liable for LLC debts beyond their capital contribution

Under Minn. Stat. Ch. 322C, LLC members enjoy limited liability and are not personally liable for the debts and obligations of the LLC solely by reason of being a member.

Under Minnesota partnership law, in a general partnership, each partner is liable for partnership debts:

Answer: Jointly and severally

Under Minn. Stat. § 323A.0306, partners in a general partnership are jointly and severally liable for all obligations of the partnership.

Under Minnesota law, a corporation's articles of incorporation must be filed with:

Answer: The Minnesota Secretary of State

Under Minn. Stat. § 302A.115, articles of incorporation must be filed with the Minnesota Secretary of State to form a corporation.