Several States' Constitutions Place Stricter Limits Than the MBCA on Permissible

question 20

Multiple Choice

Several states' constitutions place stricter limits than the MBCA on permissible considerations for issuance of common shares by corporations. Which of the following considerations is permissible under the MBCA but not permissible by such state constitutions?

• A) A promoter's preincorporation services worth $25,000, which were performed prior to incorporation.
• B) A gratuitous promise to contribute $35,000 in cash to the corporation.
• C) Bonds of another corporation, which are worth $15,000.
• D) The president's actual performance of services for the corporation, which are worth $50,000.

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Definitions:

Bentham's Quantitative Model

A philosophical model proposed by Jeremy Bentham, emphasizing the calculation of pleasure and pain to determine the moral rightness of actions based on their utility.

Utility Principle

A principle in ethics and economics that suggests the best action is the one that maximizes utility, often defined as maximizing happiness and minimizing suffering.

Sadistic Dictator

A ruler who derives pleasure from inflicting suffering on others, often exercising power in a cruel or brutal manner.

Kant

A German philosopher who profoundly influenced modern philosophy with his works on epistemology, ethics, and aesthetics, known for his critique of pure reason.