Question 22 Not yet answered Marked out of1 \\v Flag question Huey, Dewey and Louie form a company. Each member has equal shares, and Huey is designated as the CEO. Dewey and Louie are not corporate ofcers. The company borrows $1,000,000 from the Bank of Donald. Within the year, the company goes broke and out of business, through no fault ofthe organization. The company has only about $100,000 of assets when the business goes under. How will the bank recover its money? a. The bank will take the $100,000 in assets, and Huey, Dewey and Louie will each be liable for $300,000 of the loan b. The bank will take the $100,000 in assets, and Huey will be liable for the remaining $900,000 c. The bank will take the $100,000 in assets, and can choose to go after each shareholder Huey, Dewey and Louie, if any individual is solvent d. The bank will take the $100,000 in assets, and take a loss on the remaining $900,000 balance Question 23 Not yet answered Marked out of 1 \\V Flag question Thomas owns ten companies, each of which owns two taxi cabs. Each cab is insured for the statutorily-required minimum amount of HK$50,000. Each of the ten companies has no assets other than its respective two cabs. He uses this corporate structure purposely to limit the liabilities that can arise from any single accident involving a cab. Patricia is severely injured by a cab owned by one ofThomas' ten companies and sues to hold Thomas personally liable. What answer below best describes the possible outcome? a. Unless she can show that the relevant company was a sham or illegal, she is very unlikely to succeed against Thomas b. Whether she can succeed against him will largely depend on whether Thomas knew that such an accident was likely to occur L c. Whether she can succeed against Thomas will largely depend on whether Patricia is able to pay her hospital bills Question 24 Not yet answered Marked out of1 \\v Flag question Which of the following statements about legal derivative actions is/are correct? 1. Derivative actions give shareholders the opportunity to seek legal redress for negligent actions of directors. 2. In a derivative action, the company will be the plaintiff of the action. 3. The concept of "derivative action\" was created largely because ofthe "proper plaintiff\" rule a. 1,2and 3 b. 'l and 2 only c. 2 and 3 only d. 'I only e. 'I and 3 only Question 25 Not yet answered Marked out of1 \\V Flag question Which of the following statements is/are true? \\ a. Generally, every company must deliver an annual return to the Registrar within 42 days of its return date. \\ b. A private company that is dormant is still required to submit an annual return \\ c. Annual return is similar to paying annual corporate tax d. None of the above statements are true Question 26 Not yet answered Marked out of1 \\V Flag question Sarah is a director of Hype Limited ("Hype"), a listed company (i.e., she sits on Hype's board of directors). She is NOT an employee of Hype. Her only source of income is the compensation she receives for her work as a director of Hype, she has been a director of Hype for 15 years, and her brother is Hype's CEO' Which ofthe following best describes the type of director she is.7 \\ as She is an executive director L b. She is a non-executive director ct She is an independent non-executive director 7' d. None of the above Question 27 Not yet answered Marked out of1 \\V Flag question Which of the following is NOT a method to conduct a share buy-back for a listed company? a. A contract to buy-back b. A general offer c. A market buy-back A d. A reverse merger Question 28 Not yet answered Marked out of1 \\V Flag question Which of the following is NOT true? a. A special resolution requires a supermajority to pass Awritten resolution does not require everyone to signify support (i.e., does not have to be unanimous) c. Either a show of hands vote or vote by poll can be used when voting on resolutions at a meeting \\ d. An ordinary resolution requires a simple majority to pass Question 29 Not yet answered Marked out of1 \\v Flag question In the context of a takeover/acquisition situation, the acquirer has to have acquired (or contracted unconditionally to acquire) what percentage of shares to which the offer relates for a "squeeze-out" or a \"sell-out\"? a. 90% for a "squeeze-out"; 51% for a "sell-out\" b. 90% for both situations c. 51% for both situations d. 100% for both situations e. 51% for a "squeeze-out"; 90% for a "sell-out" f. 75% for both situations Question 30 Not yet answered Marked out of 1 P Flag question As discussed in class, directors are fiduciaries and owe fiduciary duties as directors. Which of the following are fiduciary duties? 1. Duty to exercise powers for their proper purpose. 2. Duty to not allow any conflict between their duties as directors and their personal interests. 3. Duty to act bona fide for the benefit of the company. 4. Duty of expertise. O a. only 1, 2 and 4 O b. only 2, 3 and 4 O c. All of the above are fiduciary duties O d. only 1, 2 and 3Question 31 Not yet answered Marked out of1 \\V Flag question A private company limited by shares may raise capital via a rights issue (also referred to as a rights offering) if a. The rights issue is non-renounceable \\ b. The rights issue is renounceable \\ c. It does not matter if the rights issue is renounceable or non-renounceable d. A private company limited by shares may not raise capital via a rights offering Question 32 Not yet answered Marked out of 1 \\v Flag question The court issued a winding-up order for Company X Limited. Upon investigating Company X Limited's records, the liquidator found that Company X Limited has the following creditors: 0 Jordan, an employee owed $8,000 in wages due for the month preceding the liquidation. I Kale Limited, an unsecured creditor owed $100,000 for unpaid goods. ' Hazel, who has a floating charge over the company/s inventory, to secure a debt of $13,000. Assuming Company X Limited has $8,000 in its bank account, which of the creditors is/are likely to receive at least some money from the liquidator? a. Jordan only b. Hazel only c. Jordan and Kale d. Jordan and Hazel e. Kale only f. Hazel and Kale Question 33 Not yet answered Marked out ofi \\V Flag question Jack andJill are the only directors and equal shareholders ofa Hong Kong private company limited by shares, Red Limited ("Red\"). Unfortunately,Jack unexpectedly dies and his ownership in Red passes to his young adult daughter Hazel. In Red's articles of association, a director has sole discretion to register ownership of shares. Hazel would like to register her ownership in Red, however,Jill demands that Hazel sell her 1% of her ownership in Red. Jill feels that Hazel is inexperienced and lacks knowledge about Red, so she would like to maintain majority control over the company. Which ofthe following might describe a legal duty thatJill is trying to fulfill as covered in the course? a. A duty of fairness b. A duty to act in good faith for the company c. A duty to act with care, skill, and diligence d. A duty of contractual consideration e. SinceJill's actions are unfair to Hazel,Jil| is not fulfilling any legal duty f. All of the above are correct g. All ofthe above are incorrect