The Law of Corporations and Other Business Organizations

Chapter Review Questions

1. What are some of the advantages and
disadvantages of taking a privately held
corporation public?

2. What are the two general requirements of
§ 5 of the Securities Act of 1933 with regard
to securities that are offered or sold
through any means of interstate commerce?

3. What is the due diligence defense?

To whom is the due diligence defense
available?

4. What is the purpose of Form 8-K?

5. What are short-swing profits?

6. What is the definition and the origin of
the term “blue sky laws”?

7. As a 20 percent shareholder in a publicly
owned corporation, Jane has decided to
sell her shares. What special requirements
must she comply with because she
owns such a large stake in the company?

8. What is the purpose of the Sarbanes-
Oxley Act, and what prompted its passage?

9. What are the purposes of the proxy and
the proxy statement?

10. When is the Form 10-K filed?