QUESTION 24

1. Corporate Operation: Note: For question 1, use answer items 1-4. For question 2, use answer items 5-8. For questions 3-6, use answer items 9-15. For questions 7 and 8, use answer items 16 and 17. Scroll down to complete all parts of this task. Items 1 through 6 are based on the following. In Year 1, Amber Corp., a closely held corporation, was formed by Adams, Frank, and Berg as incorporators and stockholders. Adams, Frank, and Berg executed a written voting agreement which provided that they would vote for each other as directors and officers. In Year 5, stock in the corporation was offered to the public. This resulted in an additional 300 stockholders. After the offering, Adams holds 25%, Frank holds 15%, and Berg holds 15% of all issued and outstanding stock. Adams, Frank, and Berg have been directors and officers of the corporation since the corporation was formed. Regular meetings of the board of directors and annual stockholders meetings have been held. For items 1 and 2, complete the statement. Items 7 and 8 are based on the following. For items 7 and 8, indicate whether each statement is true or false. Bilk obtained an option on a building he believed was suitable for use by a corporation he and two other individuals were organizing. After the corporation was successfully promoted, Bilk met with the board of directors who agreed to acquire the property for $200,000. Bilk deeded the building to the corporation and the corporation began business in it. Bilk purchased the building for only $155,000. When the directors later learned that Bilk paid only $155,000, they demanded the return of Bilk's $45,000 profit. Bilk refused, claiming the building was worth far more than $200,000 both when he secured the option and when he deeded it to the corporation.

	Amber Corp. must
	Adams, Frank, and Berg must
	Who ordinarily elects Amber Corp.'s directors?
	Who ordinarily appoints Amber Corp.'s officers?
	Who ordinarily would operate Amber Corp.'s day-to-day business?
	Who ordinarily would adopt Amber Corp.'s initial bylaws?
	It was improper for Bilk to contract for the option without first having secured the assent of the Board of Directors.
	Even if, as Bilk claimed, the building was fairly worth more than $200,000, Bilk nevertheless must return the $45,000 to the corporation.

1. Be formed under a state's general corporation statute
2.	Include its corporate bylaws in the incorporation documents filed with the state
3.	Include the names of all directors in its Articles of Incorporation
4.	Include the names of all stockholders in its Articles of Incorporation
5.	Be elected as directors because they own 55% of the issued and outstanding stock
6.	Always be elected as officers because they own 55% of the issued and outstanding stock
7.	Always vote for each other as directors because they have a voting agreement
8.	Always vote for each other as directors because they are the founding stockholders
9.	Audit committee
10.	Board of directors
11.	Independent directors
12.	Promoter
13.	Officers
14.	Outgoing directors
15.	Stockholders
16.	True
17.	False