John and George Are the Shareholders of a Private Provincial

question 5

Multiple Choice

John and George are the shareholders of a private provincial company,which has capital assets of $250 000.00.Lately,due to the recession,the company has not been doing well financially,but it is going to issue dividends of $50 000.00 each to John and George.A few days later the company declares bankruptcy.In this case the creditors of the company

• A)can recover the value of the dividends from John and George as shareholders.
• B)can look to the assets of the company.
• C)can recover the value of the dividends from John and George as directors.
• D)can look to the assets of the company and receive the value of the dividends issued to John and George.
• E)all of the above

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Definitions:

Equal Protection Clause

The provision in the Fourteenth Amendment to the U.S. Constitution that guarantees that no state will “deny to any person within its jurisdiction the equal protection of the laws.” This clause mandates that state governments treat similarly situated individuals in a similar manner.

Suspect Trait

A characteristic or feature in a person that may cause them to be viewed with suspicion or as a potential culprit in a criminal investigation.

Compelling Government Interest

A test of constitutionality that requires the government to have compelling reasons for passing any law that restricts fundamental rights, such as free speech, or distinguishes between people based on a suspect trait.

Federal Form

A standardized document required by a federal agency for specific purposes.