MT Bar Business Organizations

Question 1

Under the Montana Business Corporation Act, a corporation is formed upon:

Accepted Answer

Filing of articles of incorporation with the Montana Secretary of State

Answer

Adoption of bylaws by the board

Answer

Issuance of shares to shareholders

Answer

Execution of a shareholder agreement

Question 2

The business judgment rule in Montana protects corporate directors from liability when they:

Accepted Answer

Make informed, good faith decisions in the honest belief they act in the corporation's best interest

Answer

Act in self-interest on transactions involving the corporation

Answer

Fail to attend any board meetings in a fiscal year

Answer

Approve transactions without reviewing financials

Question 3

Under Montana law, piercing the corporate veil to impose personal liability on shareholders typically requires:

Accepted Answer

A showing that the corporate form was used to perpetrate fraud or that the corporation was merely an alter ego of the shareholder

Answer

Any shareholder with more than 10% ownership

Answer

Insolvency of the corporation alone

Answer

Failure to file annual reports

Question 4

A Montana limited liability company provides members with limited liability protection, meaning members are generally:

Accepted Answer

Not personally liable for LLC debts and obligations

Answer

Personally liable for all LLC debts

Answer

Liable up to the amount of their capital contribution only

Answer

Liable for contracts but not torts

Question 5

Under Montana partnership law, partners in a general partnership are:

Accepted Answer

Jointly and severally liable for all partnership obligations

Answer

Liable only to the extent of their capital contribution

Answer

Liable only if they personally participated in the act

Answer

Protected from personal liability for contract debts

Question 6

Under the Montana Business Corporation Act, shareholders generally have the right to inspect corporate records:

Accepted Answer

Upon written demand for a proper purpose

Answer

Without restriction at any time

Answer

Only at annual meetings

Answer

Only through a court order