Business Organizations Flashcards
7 cards from real OK BAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Business Organizations flashcards as text
Under the Oklahoma General Corporation Act, what is the minimum number of directors a newly formed corporation must have?
Answer: One
Oklahoma's corporation statute allows a newly formed corporation to have as few as one director, consistent with modern corporate law trends.
A shareholder derivative suit allows a shareholder to:
Answer: Sue on behalf of the corporation for wrongs done to the corporation
In a derivative suit, the shareholder is the nominal plaintiff but sues on behalf of the corporation to redress wrongs done to the corporation itself.
The business judgment rule protects corporate directors from personal liability when they:
Answer: Act in good faith, with due care, and in the honest belief that the action serves the corporation's best interest
The business judgment rule creates a rebuttable presumption that directors act on an informed basis, in good faith, and in the honest belief that the action is in the corporation's best interest.
Piercing the corporate veil is a doctrine that:
Answer: Holds shareholders personally liable for corporate debts by disregarding the separate corporate form
Courts pierce the corporate veil to hold shareholders personally liable when the corporate form is used to perpetrate fraud, evade obligations, or when the corporation lacks a separate identity from its owners.
Under the Oklahoma General Corporation Act, which of the following is NOT required to be included in a corporation's articles of incorporation?
Answer: The names of the initial board of directors
Oklahoma's articles of incorporation require the corporate name, authorized shares, registered agent information, and incorporators' names, but not the names of initial directors.
A shareholder's preemptive right grants the shareholder the ability to:
Answer: Purchase a pro-rata share of any new stock issuance before it is offered to the public
Preemptive rights allow existing shareholders to maintain their proportional ownership interest by purchasing newly issued shares before outsiders are given the opportunity.
Under Oklahoma law, the primary purpose of the required annual meeting of shareholders is to:
Answer: Elect directors and transact other business properly before the meeting
The annual shareholder meeting primarily serves the corporate governance purpose of electing directors and conducting other shareholder business.