Business Organizations Flashcards

Under Oklahoma law, what duty does a majority shareholder owe to minority shareholders in a closely held corporation?

Answer: A fiduciary duty of good faith and fair dealing

Oklahoma courts recognize that majority shareholders in closely held corporations owe a fiduciary duty of good faith and fair dealing to minority shareholders.

Which of the following correctly describes 'piercing the corporate veil' under Oklahoma law?

Answer: Courts may disregard the corporate entity and hold shareholders personally liable when the corporation is a mere instrumentality or alter ego used to perpetrate a fraud

Oklahoma courts will pierce the corporate veil when the corporation is used as an alter ego or mere instrumentality, particularly to perpetrate fraud or injustice.

An LLC operating agreement is silent on how profits are allocated. Under the Oklahoma Limited Liability Company Act, profits are allocated:

Answer: Equally among all members regardless of contribution

Under the Oklahoma LLC Act, when the operating agreement is silent, profits and losses are allocated equally among members.

A promoter signs a contract on behalf of a corporation not yet formed. After incorporation, the corporation expressly adopts the contract. What is the promoter's liability?

Answer: The promoter remains liable unless the other party expressly agrees to release the promoter (novation)

Adoption of a pre-incorporation contract by the corporation does not automatically release the promoter; a novation requiring the other party's agreement to substitute the corporation for the promoter is needed.

Under Oklahoma's Revised Uniform Partnership Act, what is the effect of filing a 'statement of authority' with the Oklahoma Secretary of State?

Answer: It grants or limits the authority of partners to enter transactions on behalf of the partnership and provides constructive notice to third parties

A statement of authority filed under ORUPA grants or limits partner authority for transactions affecting real property and provides constructive notice of the limitations to third parties.

Under Oklahoma law, which of the following is a proper ground for judicial dissolution of a corporation?

Answer: Deadlock among directors that cannot be broken and threatens irreparable injury to the corporation

Oklahoma courts may order judicial dissolution when director deadlock cannot be broken and irreparable injury threatens the corporation, among other statutory grounds.

In an Oklahoma general partnership, a partner transfers her entire partnership interest to a third party. What rights does the transferee acquire?

Answer: Only the right to receive the distributions the transferring partner would have received; no management or voting rights

Under ORUPA, a transferee of a partnership interest receives only the transferor's economic rights (distributions) and does not become a partner or acquire management or voting rights without consent of all partners.