OK Bar Business Organizations 3

Question 1

Under agency law, a principal is vicariously liable for torts committed by an employee acting within the scope of employment under the doctrine of:

Accepted Answer

Respondeat superior

Answer

Apparent authority

Answer

Ratification

Answer

Inherent agency power

Question 2

An agent has apparent authority to bind the principal when:

Accepted Answer

A third party reasonably believes the agent has authority based on the principal's conduct or representations

Answer

The principal expressly grants the agent written authorization to act

Answer

The agent acts in an emergency to protect the principal's interests without prior consent

Answer

The agent discloses to the third party that the principal's identity is confidential

Question 3

Which business entity provides BOTH pass-through taxation AND limited liability protection for ALL of its owners?

Accepted Answer

Limited liability company (LLC)

Answer

General partnership

Answer

Sole proprietorship

Answer

C-corporation

Question 4

A principal is generally bound by an agent's previously unauthorized act when:

Accepted Answer

The principal later ratifies the act by accepting its benefits or expressly affirming it with full knowledge

Answer

The unauthorized act ultimately benefited the principal financially

Answer

The agent acted in good faith and reasonably believed authorization existed

Answer

The third party was unaware that the agent lacked actual authority at the time of the act

Question 5

An S-corporation differs from a C-corporation primarily because an S-corporation:

Accepted Answer

Avoids entity-level federal income tax by passing income and losses through to shareholders

Answer

May have an unlimited number of shareholders without restriction

Answer

Provides greater personal liability protection to its shareholders than a C-corporation

Answer

May issue multiple classes of stock with different voting and economic rights

Question 6

Under Oklahoma law, shareholder approval for a corporate merger is generally required when:

Accepted Answer

The surviving corporation's articles change significantly or shareholders face substantial dilution of their interests

Answer

The merger involves only a parent corporation absorbing its wholly-owned subsidiary

Answer

The board of directors unanimously approves the merger terms without any dissent

Answer

The merger involves a foreign corporation incorporated in another state

Question 7

Under Oklahoma law, which of the following corporate actions typically requires a supermajority vote of shareholders rather than a simple majority?

Accepted Answer

Amending the corporation's articles of incorporation

Answer

Declaring a routine cash dividend to common shareholders

Answer

Electing new members to the board of directors at the annual meeting

Answer

Approving the appointment of the corporation's independent auditor