REVIEW - Test 2 (Chapter 7)

After consulting with his personal financial advisors, Kumail has bought shares in TechCo Inc. TechCo is a public corporation, and Kumail will be the holder of 50 Class B shares. Kumail is not otherwise involved in the company. Absent other facts, which of the following is not part of Kumail’s rights as a shareholder of TechCo?

• The right to vote in respect of certain fundamental changes

• The right to review the corporation’s records

• The right to be protected from oppressive acts of the directors

• The right to authorize the official presentation of shares in a board meeting

 

Which of the following best represents a disadvantage of using a limited partnership structure for a business?

• Limited partners do not have any liability for the debts of the business.

• Limited partners are required by law to consent to a partnership agreement.

• Limited partners can force dissolution of the business and distribution of its assets in certain circumstances.

• Limited partners are forced to continue their involvement even if they are dissatisfied with the business.

   

Which of the following is not an example of an agency relationship (i.e. agent–principal) commonly found in the business context?

• Employee–employer

• Partner– partnership

• Incorporator–corporation

• Salesperson–consumer

The use of a corporate seal is required under the Ontario Business Corporations Act to create a binding contract.

• True

• False

An incorporator who signed a pre-incorporation contract will be personally liable if the corporation does not come into existence or refuses to ratify the contract after incorporation.

• True

• False

Which of the following is not a way of minimizing your risk when entering into a joint venture?

• Determine the legal requirements of your joint venture.

• Devise a formula or other method for sharing profits and losses.

• Agree to a method of resolving any dispute that might arise.

• Forego the need to obtain liability insurance.

In the context of a legal agency relationship, who is an agent?

• A person who has the authority to act on behalf of another person

• A person who can act on behalf of another person without authority

• A person who is completely responsible for the acts of another person

• A person who gives authority to another person to act on their behalf