Securities
Rule 16b requires that any ____ realized by a director, officer, or shareholder owning more than ____ percent of the outstanding shares of the corporation from any purchase and sale, or sale and purchase, within a period of ____ months must be returned to the corporation
Profit
10 percent
6 months
A ____ is a writing, signed by the record shareholder, directed to the secretary of the corporation, authorizing another to vote the shares and is valid for ____ months unless it provides otherwise.
Proxy
11
A director must discharge her duties in ___ ____ and in a manner that is in the ___ ____ of the corporation, with the degree of care, skill and diligence an ____ ____ ____ would exercise under like circumstances
Good Faith
Best Interest
Ordinary Prudent Person
This individual acts on behalf of a corporation that is not yet formed. They are fiduciaries of each other and the corporation.
Promotor
An association of two or more persons to carry on as co-owners of a business for profit.
General Partnership
A Rule 10b-5 violation requires (1) scienter, (2) deception, (3) in connection with the ____ or _____ of _____, (4) in ____ ____.
Purchase or Sale
Securities
Interstate Commerce
A ____ sues to enforce the corporation's claim, not her own personal claim. This is called a ___ ___.
Shareholder
Derivative Suit
The ___ of ____ prevents directors from overpaying for property or employment services
Doctrine of Waste
A device invoked against a third party who directly dealt with the business, or used to prevent the business from avoiding its obligation by asserting lack of valid formation
Corporation by Estoppel
The ____ has ____ ____ when there's a representation made to a third party purporting to be the principal's agent and a contract is made on behalf of the principal
Agent
Apparent Authority
A ____ can be held liable under Rule 10b-5 only if the tipper breached a duty, the tippee traded on the tip, and the _____ knew that the ____ was ____ a _____.
Tippee/ Tippee / Tipper/ Breaching/ Duty
___ ___ can be called by either (1) the board, (2) the president, (3) the holders of at least 10 percent of voting shares, or (4) anyone else authorized by the bylaws. Notice must be sent at least ___ to ____ days in advance.
Special Meetings
10-60 days
Directors are insulated from liability for the consequences of a business decision if they exercised ____ ____, acted in ___ ____, and had a ____ ____ for the decision.
Due Care
Good faith
Rational Basis
If explicitly provided for in the articles of incorporation, ___ ____ gives the shareholders a right to maintain the same percentage of ownership by buying stock when there is a new issuance of stock for cash
Preemptive Rights
This occurs when the principal accepts the benefit of any agreement the agent enters on behalf of the principal.
Ratification
Rule 16(b) only applies to _____ ______. A _____ _____ is one that is either listed on a ____ ____ or has at least _____ shareholders and $___ in assets.
Reporting Corporations
National Exchange
500/ $10 million
___ ___ is a device to give small shareholders a better chance of electing someone to the board and must be included in the articles of incorporation to be valid.
Cumulative Voting
______ are selected and removed by the board, and the _____ sets their compensation
Officers
Board
____ set corporate policy and manage the company on the grand scale and can never act by _____. They must participate on their own.
Directors
Proxy
Where an agent's actual authority has been terminated, she will have apparent authority to act on the principal's behalf as to all third parties with whom the principal knows the agent dealt unless and until the third parties receive either actual or constructive notice of the termination. However, death or incompetency of the principal terminates all authority of the agency without notice to either the agent or third party.
Lingering Authority
A ____ can be liable under Rule 10b-5 if the tip was made for any ____ purpose. Even if the tipper does not share in the profits, the tipper may be liable if she received a ___ ____, such as making a gift or enhancing reputation.
Tipper
Improper
Personal Benefit
Courts will hold ______ personally liable for corporate debts when they treat assets of the corporation as their own, by using ____ funds to pay their _____ debts, or fail to abide by corporate formalities. This is called ____ the ____ ___.
Shareholders
Corporate/ Personal
Piercing the Corporate Veil
Where a director usurps a corporate opportunity, the corporation can recover the profits that the director made from the transaction or may force the director to convey the opportunity to the corporation. This is called a ___ ___.
Constructive Trust
To be approved by the Secretary of State, the Articles of Incorporation must include: (1) ___ of the ____, (2) ___ & ____ of incorporators, (3) ____ for ____ of ____, (4) ___ ____, and (5) number of ___ ____.
(1) name of the corporation, (2) names/addresses of incorporators, (3) agent for service of process, (4) corporate purpose, and (5) number of authorized shares
An agency may be terminated by (1) ____ agreement, (2) _____ or frustration of agency goals, (3) _____ by principal, (4) _____ by agent, (5) ____, ____, or bankruptcy if parties are individual, or (6) _____ or winding up of business
(1) Express (2) Completion (3) Revocation (4) Rejection (5) Death, Insanity or (6) Receivership