MT Bar Business Organizations 2

Question 1

An agent acting with apparent authority in Montana binds the principal when:

Accepted Answer

A third party reasonably believes the agent has authority based on the principal's representations

Answer

Apparent authority arises when the principal's words or conduct cause a third party to reasonably believe the agent has authority to act on the principal's behalf.

Question 2

Under Montana law, a corporation's articles of incorporation must include all of the following EXCEPT:

Accepted Answer

The names of all initial shareholders

Answer

Montana's articles of incorporation require the corporate name, authorized shares, and registered agent information, but the identities of initial shareholders are not required in the articles.

Question 3

A Montana close corporation differs from a publicly held corporation primarily in that:

Accepted Answer

It has a small number of shareholders and typically imposes share transfer restrictions

Answer

A close corporation in Montana typically has few shareholders, restricts transfer of shares to outsiders, and often operates informally with shareholders also serving as directors and officers.

Question 4

Under the Montana Uniform Limited Partnership Act, a limited partner loses limited liability protection if they:

Accepted Answer

Take part in the control of the business in a way that a third party reasonably believes they are a general partner

Answer

Historically, a limited partner who participates in control of the business can be held liable to third parties who reasonably believed them to be a general partner.

Question 5

Under Montana law, a merger of two corporations requires approval by:

Accepted Answer

The board of directors and a majority of shareholders entitled to vote

Answer

A Montana corporate merger requires both board approval of the merger plan and shareholder approval by a majority of shares entitled to vote, under MCA § 35-1-801.

MT Bar - Montana Bar Exam Practice Test

MT Bar - Montana Bar Exam Practice Test

MT Bar Business Organizations 2