Ray Is a Shareholder of Small Biz Company (SBC)

question 36

Multiple Choice

Ray is a shareholder of Small Biz Company (SBC) .When the direc-tors fail to undertake an action to redress a wrong suffered by SBC,Ray files a suit on the firm's behalf.
-Larry is a shareholder for Custom Colors,Inc.If Custom Colors fails,Larry will

• A)be liable for Custom Colors' debts.
• B)not be liable for Custom Colors' debts.
• C)be able to reclaim his initial investment in Custom Colors.
• D)be able to reclaim his initial investment in Custom Colors plus damages.

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Definitions:

Unauthorized Check

A bank check that is issued without the account holder's approval or knowledge, potentially leading to fraud.

Overdraft Protection

A financial service that prevents checks, withdrawals, and other transactions from resulting in a negative account balance, often by linking to another account or providing a line of credit.

Federal Law

Laws passed by the national legislature of a country, applicable throughout the country.

Dishonored Check

A check that a bank refuses to pay, usually because the account holder does not have enough funds.