MT Bar Business Organizations 1

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

A Montana corporation comes into existence upon the effective date of its articles of incorporation filed with the Secretary of State under MCA § 35-1-207.

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

The business judgment rule presumes directors acted on an informed basis, in good faith, and in the honest belief the decision was in the corporation's best interest.

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

Montana courts pierce the corporate veil only when shareholders use the corporation as a sham to commit fraud or where the corporation is so controlled as to be the shareholders' alter ego.

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

Members of a Montana LLC are generally not personally liable for the debts and obligations of the LLC beyond their capital contribution, similar to corporate shareholders.

Question 5

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

Accepted Answer

Jointly and severally liable for all partnership obligations

Answer

In a Montana general partnership, each partner is jointly and severally liable for all partnership debts and obligations under MCA § 35-10-307.

MT Bar - Montana Bar Exam Practice Test

MT Bar - Montana Bar Exam Practice Test

MT Bar Business Organizations 1