Business Law Practice

Please choose the correct answer in relation to "Fundamental Changes"

• There are changes in the rules that govern the org and what it does

• There are changes in the members of the org and each member's stake

• There are changes that imply putting an end to the org's existence

• All of the above

Please choose the correct description of a SHA's:

• An agreement by which the shareholders of the company (with the intervention of the company, on some cases) agree on terms of their investments in the company, regulating matters such as voting rights, governance, dividend policy, lock-up periods, drag and tag along rights, and exit strategies

• An agreement by which the shareholders of a company and its directors may agree on voting rights as well as on the compensation package of directors

• An agreement by the shareholders concerning the company that is filed with the Commercial Registry and which qualifies as the official bylaws of the company, regulating all relevant maters in relation to its functioning.

• An agreement by which the shareholders of a company agree to sell the shares of the company to new shareholders

Agency problems arise when:

• The corporation's managers/directors and shareholders have separate interests

• The corporation's managers/directors and shareholders all have similar interests

• The corporation's shareholders and creditor have similar interests

• The employees have separate interest amongst themselves

Please choose the correct answer: a "share deal" in M&A describes a transaction

• In which the buyer buys all or part of the assets of a company

• In which a buyer acquires shares of a company

• In which a company merges into another company

• In which a company spins-off part of its assets and liabilities and another company assumes such assets and liabilities in exchange of a price

Directors are liable to the company, its shareholders and its creditors for any damages caused by acts which are:

• Contrary to the law

• Performed without due care or stemming from willful misconduct

• All of the above

If a company is formed with limited liability

• All of the below answers are correct

• The liability of its individual members is limited to the amount which the member has agreed to subscribe

• Shareholders will be personally liable for all of the company's acts

• Each member is fully liable to the extent of their private asset for the company's debt

Consideration in a contract means

• A person has the mental capacity to enter into a contract

• The two parties deal with the contract in a polite manner

• The contract is legal and lawful

• Something of value is being exchanged by the two parties

Limited Liability means

• Creditors of the company have no claim against shareholders' personal assets

• Creditors of shareholders can claim against company's assets

• The individual shareholder cannot withdraw their share of firm asset's at will

• None of the above is correct

The essential difference between a public and private company is

• A public company is a separate legal person and a private company is not

• Public companies can apply to be listed and offer their shares to the public, thereby raising capital in the public arena

• In private companies the liability of its individual members is limited to the amount which the members has agreed to subscribe and, in public companies, liability, is in effect joint and several

• All of the above

What are the benefits of public trading

• Liquidity of investments

• It provides a useful measure of firm performance (through the share price)

• Facilitates diversified investments

• All of the above