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1) Answer (B) is correct.
Bylaws govern the internal structure and operation of a corporation. Initial bylaws are adopted by the incorporators or the board. They may contain any provision for managing the business and regulating the affairs of the corporate entity not in conflict with the law or the articles of incorporation.
Answer (A) is incorrect. The articles contain only basic information that must be filed with a designated state official as part of forming the corporation.
Answer (C) is incorrect. A certificate of authority is required to do business in a state where the corporation is not incorporated. It is obtained from the
secretary of state after paying fees and designating a resident agent.
Answer (D) is incorrect. A shareholder agreement governs the exercise of the corporate powers; the management of the business and affairs of the corporation; or the relationship among the shareholders, the directors, and the corporation. For example, it may eliminate the board or restrict its powers. In contrast, bylaws usually address such details as methods of electing directors or the details of scheduling meetings. Also, a shareholder’s agreement may be included in the bylaws.
2) Answer (A) is correct.
The board of directors guides management. It does not directly manage day-to-day operations of the entity. That is management’s responsibility, with the board playing an oversight role. All major corporate decisions are made or approved by the board.
Answer (B) is incorrect. The board has the duty of selection and removal of officers.
Answer (C) is incorrect. Adding, amending, or repealing bylaws is a duty of the board.
Answer (D) is incorrect. Initiation of fundamental changes, such as mergers or acquisitions, is a duty of the board.
3) Answer (C) is correct.
Control is any action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. Management plans, organizes, and directs the performance of sufficient actions to provide reasonable assurance that objectives
and goals will be achieved.
Answer (A) is incorrect. Supervision is just one means of achieving control.
Answer (B) is incorrect. Quality assurance relates to just one set of objectives and goals. It does not pertain to achievement of all established organizational objectives and goals.
Answer (D) is incorrect. Compliance is adherence to policies, plans, procedures, laws, regulations, contracts, or other requirements.