The Law of Corporations and Other Business Organizations

Chapter Review Questions

1. Suppose that Ann, Bob, and Christie are
all incorporators of the ABC Corporation.
Dan and Elaine are elected directors,
and all five are to become shareholders of
the new corporation. Before shares of
stock are actually issued, the five investors
decide to form a limited liability
company instead. Bob has taken on responsibility
for dissolving the corporation.
Who must approve the dissolution?

What if shares of stock had been issued?

2. What are the duties of the individual or
individuals who are responsible for winding
up the affairs of a dissolving corporation?

3. In states following the MBCA, what documentation
must be filed with the secretary
of state to dissolve the corporation?

4. Does the corporate existence dissolve
upon the filing of the articles of dissolution
in states following the MBCA?

If not, for what purpose(s) is the corporate
existence extended?

5. Under the MBCA, what notice of liquidation
must be given to the creditors of a
corporation?

6. What possible recourse does a minority
shareholder have when the corporate
management is deadlocked?

7. To what extent may the shareholders of a
dissolved corporation be held liable for
the debts of the corporation incurred prior
to dissolution?

8. Suppose that the ABC Corporation is
administratively dissolved on January 1,
2012, for failure to file annual reports in
compliance with the statutes of its state
of domicile. On June 30, 2012, the ABC
Corporation eliminates the grounds for its
dissolution to the satisfaction of the secretary
of state and becomes reinstated.

Could the shareholders of the ABC Corporation
be held personally liable for obligations
incurred on behalf of the corporation
on March 15, 2012, on the grounds
that the corporation did not legally exist?

9. In a state following the MBCA, can a
creditor of a dissolved corporation who
has received proper notice collect on that
claim six months after the notice was received?

10. Name three grounds for administrative
dissolution in states following the
MCBA.