Andrea Agreed to Form a Corporation with Two Friends, but Lay

question 98

Multiple Choice

Andrea agreed to form a corporation with two friends, but lay awake last night rethinking her decision. They agreed that they all wanted to be directors and officers and that they all would have signing authority with the bank from whom the corporation is borrowing the money. Nevertheless, she began to review her assumptions. Which of the following is true?

• A) When she signs the promissory note at the bank on behalf of the corporation, she can just sign her own name; she will not be personally liable as long as she intended to sign on behalf of the corporation.
• B) As a major shareholder, she would be elected as a director every year even without such a provision in the shareholders' agreement.
• C) She would be able to ask the court for relief from oppression if she disliked a decision passed by the majority of the directors.
• D) As a shareholder, she is free to compete with the company even if she is a director as well.
• E) She would be able to bring an action on behalf of the company if one of the directors breached his fiduciary duty to the corporation and the other directors refused to do anything about it.

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Definitions:

Tax Efficacy

The effectiveness of a tax system or policy in achieving its intended financial or economic objectives while minimizing negative impacts on taxpayers.

Strategic Philanthropy

A form of philanthropy where donors seek to achieve the greatest possible impact through their charitable activities by using data, research, and careful planning to address systemic issues.

Charitable Gift Annuity

A financial arrangement in which an individual donates assets to a charity in exchange for a fixed income stream for a specified term or for life.

Gifts-In-Kind

Non-monetary items of tangible personal property or services provided to an organization as donations.