OH Bar Business Associations

Question 1

Under the Ohio Revised Code, what is the minimum number of incorporators required to form a corporation?

Accepted Answer

One

Answer

Two

Answer

Three

Answer

Five

Question 2

Under the business judgment rule, a director's decision is protected from personal liability if the director acts:

Accepted Answer

In good faith, with the care of an ordinarily prudent person, and in a manner reasonably believed to be in the best interests of the corporation

Answer

After obtaining a formal legal opinion before making any significant decision

Answer

With shareholder approval for all decisions that affect corporate assets

Answer

Without any personal financial interest in the outcome of the decision

Question 3

Which of the following is NOT a factor courts typically consider when deciding whether to pierce the corporate veil?

Accepted Answer

Whether the corporation had too many shareholders

Answer

Whether the corporation maintained adequate capitalization

Answer

Whether the corporation failed to observe corporate formalities

Answer

Whether the corporate form was used to perpetrate fraud

Question 4

Under Ohio law, a shareholder's preemptive right to purchase newly issued shares:

Accepted Answer

Must be expressly granted in the articles of incorporation to exist

Answer

Exists automatically unless denied or limited by the articles of incorporation

Answer

Cannot be waived under any circumstances once granted

Answer

Applies only to publicly traded corporations listed on a national exchange

Question 5

Under Ohio law, an interested director transaction (where a director has a personal financial interest) is best characterized as:

Accepted Answer

Voidable unless it was fair to the corporation or was approved by disinterested directors or shareholders after full disclosure

Answer

Automatically void and unenforceable as a matter of public policy

Answer

Valid as long as the director discloses the interest and abstains from voting

Answer

Valid if the transaction was entered into at fair market value regardless of disclosure

Question 6

What is the legal effect of an Ohio corporation's failure to hold required annual shareholder meetings?

Accepted Answer

The corporation does not automatically lose its corporate status, but may face judicial dissolution or other consequences

Answer

The corporation is automatically dissolved by operation of law after one missed meeting

Answer

All outstanding shares are forfeited to the state treasury

Answer

The Secretary of State may void the corporation's articles of incorporation immediately

Question 7

Under Ohio law, before a shareholder may file a derivative lawsuit on behalf of a corporation, the shareholder generally must:

Accepted Answer

Make a written demand on the board of directors, unless demand would be futile

Answer

Obtain approval from a majority of all outstanding shareholders

Answer

Own at least 10% of the corporation's outstanding shares

Answer

Exhaust all available arbitration procedures specified in the articles