Secton2.Reading Flashcards
What is the difference between publicly traded and close corporations?
Public traded corporations allow the general public to buy stock, whereas close corporations are not publicly traded and are generally much smaller.
What is the role of a corporate promoter?
The promoter is the person who initially thought of the idea
How do bylaws differ from articles of incorporation?
The articles of incorporation are used to form the actual corporation, whereas the bylaws are the set of rules that are adopted by the board of directors after the corporation is formed.
How does the law prevent a corporate officer from competing with the corporation?
The corporate oppurtunity doctrine requiers them to notify the corporation of any business oppurtunity that the corporation may be interested in pursuing. If the corporation does not act, the officer is allowed to proceed with his dealings.
When might a creditor be able to pierce the corporate veil?
If a corporation were to start another buisness as a subsidary and the subsidary were to go broke it is possible that the corporate veil may be pierced. Generally, if the parent corp and/or stockholders are highly involved with the subsidary there is a chance that the corporate veil may be pierced.
What is the fiduciary duty?
It is the fiduciary duty of majority share holders (or people in power) to not opress the minority share holders.
What does fiduciary mean?
A position of trust and confidance
What are the disadvantages of going public?
It is very expensive to hire the lawyers, CPA; Ownership/Control of the corp is diluted; Once a company is public it is generally requiered to make any major business events public; Shareholders/Employees often become consumed by daily fluctuations in the value of their stock portfolio
What are the advantages of an LLC over an LLP?
An LLP is between two or more people and disolves when one of the partners dies; a LLC is between one or more people.
What are the advantages of an LLC over an S Corp?
S Corp are limited to 100 shareholders, while an LLC has no limit.
What are the drawbacks of investing in coal today?
The demand for coal has taken a sharp decline over the past year, with a decline in price of over 50% per metric ton. Even with a 15% deductable investing in coal companies is still not worthwhile as the price to extract the coal is often higher then the price at which coal can sell.
What proportion of electrical usage comes from coal?
32%
Why has the production of thermal coal dropped recently?
Rather then buying thermal coal, utilities are buying natrual gas which is cleaner.
Why has the production of met coal dropped recently?
China’s demand for met coal has dropped significantly; dropping 50% in one month.
What is thermal coal?
Thermal coal is low grade coal often used by power plants.
What is met coal?
Met coal, or metallurgiacal coal, is premium coal that is often used in steelmaking.
What is the main complaint in the Facebook IPO case?
Many investors feel that they were not adicuatily notified of the shift of users from desktop computers to mobile devices, thus violating the prospectus.
What is a prospectus?
A document given to potential investors describing the security/ies offered for sale, the corporation itself and the risks assiciated with investing.
What is disclosure, and how does it differ from approval?
Disclossure is the requierment to make all essential information convering the issuance or resale of stocks to be made avalible; However, disclosure differs from apporval as disclosure only means to make the information know whereas approval would make sure that the information is adequate.
Will Dem or Rep be more likely to pursue more security regualtions? Why?
Democrates would be more likely to pursue more stricked regualtions as they want to limit the power of large corporations.
What is insider trading?
If a person on the board, or even lawyers and CPAs, received advanced information about the firm and then were to act on that based on what the stock would do they are often guilty of insider trading
Why has Montana seen such a rise in the sale of RVs?
Montana has no sales tax, so money is saved when purchasing an RV; Montana also has a very low vehicle registration fee and also has no vehicle inspection fee.
Are alcoholics protected by diabilities law?
Yes – An employeer cannot not hire someone b/c they are an alcoholic and accomidations must be made for an alcoholic. However the employee could be fired if alcohol adversly effects the job.
What effect can one slacker/jerk have in a groups performance?
Decrease performance by 30-40%
