Question
Constitutional Law | Judicial Review and Justiciability | MULTIPLE_CHOICE
Hard
A trade association of independent pharmacies challenged a state rule requiring pharmacies to disclose customer records to a state database. The association alleges that several named member pharmacies must comply next m...
Citations: U.S. Const. art. III, sec. 2, Hunt v. Washington State Apple Advertising Commission, Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc.
Question
Business Associations | Directors and Officers | ESSAY
Medium
...Its bylaws require three directors for a quorum and majority approval of directors present at a meeting. The corporation's chief operating officer has signed ordinary supply contracts up to $250,000 for years without spe...
Citations: NCBE MEE Business Associations outline, Model Business Corporation Act board-action principles
Question
Business Associations | Shareholder Rights and Derivative Suits | ESSAY
Hard
Shareholder Mira sent the board of Finch Motors, Inc. a written demand asking the corporation to sue three directors for approving a self-interested parts contract. The board formed a two-director committee to investigat...
Citations: Model Business Corporation Act derivative proceeding principles, NCBE MEE Business Associations outline
Question
Constitutional Law | Due Process and Equal Protection | MULTIPLE_CHOICE
Hard
A nonprofit sports league leases a city stadium for $1 per year. The city appoints one-third of the league's board, approves the league's annual budget, and requires the league to follow city recreation policies. The lea...
Citations: U.S. Const. amend. XIV, Brentwood Academy v. Tennessee Secondary School Athletic Association, Lugar v. Edmondson Oil Co., Jackson v. Metropolitan Edison Co.
Question
Constitutional Law | Due Process and Equal Protection | ESSAY
Medium
...wns a large recreation center but leases it for $1 per year to a nonprofit youth-sports league. The city appoints three of the league's nine board members, pays for utilities, and requires the league to submit annual bud...
Citations: U.S. Const. amend. XIV, Jackson v. Metropolitan Edison Co., Brentwood Academy v. Tennessee Secondary School Athletic Association, City of Cleburne v. Cleburne Living Center, San Antonio Independent School District v. Rodriguez
Question
Business Associations | Fiduciary Duties | ESSAY
Hard
HarborMed, Inc. develops software for hospital scheduling. Its chief technology officer, Dana, was asked by the board to explore partnerships with rural hospital networks. During that work, Dana learned that North Ridge...
Citations: NCBE MEE Business Associations outline, General corporate fiduciary-duty principles
Question
Business Associations | Directors and Officers | ESSAY
Hard
Orchid Labs, Inc. was sued after its chief financial officer, Morgan, announced revenue numbers that later proved overstated. Morgan was named in three claims. First, a securities-fraud claim by investors was dismissed o...
Citations: NCBE MEE Business Associations outline, Model Business Corporation Act indemnification principles
Question
Business Associations | Fiduciary Duties | ESSAY
Hard
VoltGrid Parent Corp. owns 82% of the voting shares of CellHome, Inc., a corporation that designs residential battery systems. The remaining shares are held by hundreds of minority investors. VoltGrid appoints all five C...
Citations: NCBE MEE Business Associations outline, NCBE July 2019 MEE controlling-shareholder analysis
Question
Business Associations | Agency | MULTIPLE_CHOICE
Easy
A consultant met with a software company and said, "I represent Northlake Bank, and I can sign a five-year licensing deal for the bank today." The bank had never communicated with the software company, had not listed the...
Citations: Restatement (Third) of Agency section 2.03
Question
Business Associations | LLC Basics | MULTIPLE_CHOICE
Easy
A member of an LLC gives notice that she withdraws as a member. The operating agreement does not say that withdrawal dissolves the LLC. Which statement is most accurate? The correct answer states the key distinction betw...
Citations: Revised Uniform Limited Liability Company Act principles
Question
Business Associations | Corporations Formation and Authority | MULTIPLE_CHOICE
Easy
A newly incorporated business has shareholders, a board of directors, officers, employees, creditors, and customers. A student asks who generally has legal authority to manage or direct the corporation's business and aff...
Citations: Model Business Corporation Act principles
Question
Business Associations | Agency | MULTIPLE_CHOICE
Medium
A restaurant employee, without authority, ordered $12,000 of specialty wine in the restaurant owner's name. The next day, the owner learned the price, quantity, and supplier. He told the employee, "You had no right to do...
Citations: Restatement (Third) of Agency section 4.01
Question
Business Associations | Fiduciary Duties | MULTIPLE_CHOICE
Medium
Corporate officers receive repeated written warnings that a plant is violating safety regulations. They deliberately ignore the warnings because stopping production would reduce quarterly bonuses. Which fiduciary-duty co...
Citations: General corporate fiduciary-duty principles
Question
Business Associations | Shareholder Rights and Derivative Suits | ESSAY
Hard
Two years ago, the directors of Cedar Analytics, Inc. reimbursed themselves for luxury travel unrelated to corporate business. At that time, Jordan owned no shares. Last year, Jordan bought 5% of Cedar's shares from a fo...
Citations: Model Business Corporation Act derivative proceeding principles, NCBE February 2022 MEE derivative-standing analysis
Question
Business Associations | Corporations Formation and Authority | MULTIPLE_CHOICE
Medium
A corporation owns one factory and all of its manufacturing equipment. Its president signs a contract to sell the factory, equipment, customer list, and trade name to a competitor. The sale is outside the ordinary course...
Citations: Model Business Corporation Act principles
Question
Business Associations | Directors and Officers | MULTIPLE_CHOICE
Easy
...d a new product line after reviewing market studies, asking questions of management, and discussing the risks. The product failed and caused a substantial loss. A shareholder sues the directors for breach of the duty of...
Citations: Model Business Corporation Act director standards
Question
Business Associations | Corporations Formation and Authority | MULTIPLE_CHOICE
Easy
A corporation's CEO signs a routine office-supply contract with a vendor that has dealt with the CEO on similar contracts for two years. The board later refuses to pay, arguing that no shareholder vote approved the contr...
Citations: Model Business Corporation Act principles
Question
Business Associations | Fiduciary Duties | MULTIPLE_CHOICE
Medium
A court finds that a corporate officer wrongfully diverted a contract opportunity that belonged to the corporation and earned $600,000 in profit from it. Which remedy is most likely available? The correct answer states t...
Citations: General corporate opportunity principles
Question
Business Associations | Directors and Officers | MULTIPLE_CHOICE
Easy
A director is sued because of actions taken as a director. The director wins dismissal of all claims on the merits and seeks reimbursement of reasonable defense expenses. Which statement is most accurate? The correct ans...
Citations: Model Business Corporation Act indemnification principles
Question
Business Associations | Directors and Officers | MULTIPLE_CHOICE
Medium
A director owns 40% of a vendor that is seeking a long-term supply contract with the corporation. The director participates in the board discussion and votes for the contract. Which statement best describes how the trans...
Citations: Model Business Corporation Act conflicted-interest principles
Question
Business Associations | Corporations Formation and Authority | MULTIPLE_CHOICE
Medium
...der received notice that the state had rejected the proposed articles of incorporation because they lacked required information. Before correcting the filing, the founder signed a supply contract in the corporation's nam...
Citations: Model Business Corporation Act principles
Question
Business Associations | LPs and LLPs | MULTIPLE_CHOICE
Medium
A judgment creditor of a limited partner wants to collect a personal judgment by taking the LP's delivery vans and voting the limited partner's interest to sell the business. What is the creditor's usual remedy against t...
Citations: Uniform Limited Partnership Act principles
Question
Business Associations | LLC Basics | MULTIPLE_CHOICE
Medium
A judgment creditor of an LLC member seeks to collect from the member's LLC interest. What is the usual effect of a charging order? The correct answer describes the usual limited remedy of a charging order. Revised Unifo...
Citations: Revised Uniform Limited Liability Company Act principles
Question
Business Associations | LLC Basics | MULTIPLE_CHOICE
Easy
A lender makes a loan to an LLC. One member signs the note on behalf of the LLC and also signs a separate section labeled "personal guaranty." Which statement is most accurate? The correct answer recognizes that the liab...
Citations: General limited-liability entity principles