[jeff]

REG Resources:

Free REG Notes & Audio – https://www.another71.com/cpa-exam-study-plan

REG 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

REG Score Release: https://www.another71.com/cpa-exam-scores-results-release

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[stoleway]

Choice C is correct because it is the only choice that frees the director from any allegations of unfair dealings and conflict of interest. Since the director holds a fiduciary duty to the organisation, It is very important for a director to disclose certain contracts to the board to determine the fairness and legality of the contract.

Note that the director does not have to vote on this because the poacher cannot be the gatekeeper ( I stand to be corrected though)

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

Choice C is correct because it is the only choice that frees the director from any allegations of unfair dealings and conflict of interest. Since the director holds a fiduciary duty to the organisation, It is very important for a director to disclose certain contracts to the board to determine the fairness and legality of the contract.

Note that the director does not have to vote on this because the poacher cannot be the gatekeeper ( I stand to be corrected though)

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Kenada]

Yes its C,

I picked B as well 🙂

Thank you Stoleway your explanation helped.

FAR 05/27/14; 786/110 - Done !

[Kenada]

Yes its C,

I picked B as well 🙂

Thank you Stoleway your explanation helped.

FAR 05/27/14; 786/110 - Done !

[mags603]

I think the Board votes, not director so I would also go with B

[mags603]

I think the Board votes, not director so I would also go with B

[Kenada]

Sigh. Its one of those questions huh.

Answer (C) is correct.

To protect the corporation against self-dealing, a director is required to make full disclosure of any financial interest (s)he may have in any transaction to which both the director and the corporation may be a party. Under the RMBCA, a transaction is not voidable merely on the grounds of a director’s conflict of interest if the transaction is fair to the corporation or has been approved by a majority of (1) informed, disinterested qualified directors or (2) holders of qualified shares. This rule applies even if the director was counted for the quorum and voted to approve the transaction. A qualified director does not have (1) a conflict of interest regarding the transaction or (2) a special relationship (familial, professional, financial, etc.) with another director who has a conflict of interest. Shares are qualified if they are not controlled by a person with (1) a conflict of interest or (2) a close relationship with someone who has a conflict. Thus, the director who contracts with the corporation cannot provide the vote that approves the contract.

FAR 05/27/14; 786/110 - Done !

[Kenada]

Sigh. Its one of those questions huh.

Answer (C) is correct.

To protect the corporation against self-dealing, a director is required to make full disclosure of any financial interest (s)he may have in any transaction to which both the director and the corporation may be a party. Under the RMBCA, a transaction is not voidable merely on the grounds of a director’s conflict of interest if the transaction is fair to the corporation or has been approved by a majority of (1) informed, disinterested qualified directors or (2) holders of qualified shares. This rule applies even if the director was counted for the quorum and voted to approve the transaction. A qualified director does not have (1) a conflict of interest regarding the transaction or (2) a special relationship (familial, professional, financial, etc.) with another director who has a conflict of interest. Shares are qualified if they are not controlled by a person with (1) a conflict of interest or (2) a close relationship with someone who has a conflict. Thus, the director who contracts with the corporation cannot provide the vote that approves the contract.

FAR 05/27/14; 786/110 - Done !

[Kenada]

Which of the following actions may be taken by a corporation’s board of directors without shareholder approval?

A. Dissolving the corporation.

B. Selling substantially all of the corporation’s assets.

C. Purchasing substantially all of the assets of another corporation.

D. Amending the articles of incorporation.

I have another one…

I know it can't be A or D that you need shareholders for that. I picked C just because when I looked at B – i really doubt you can sell all the assets. Isn't that like liquidating the company?

FAR 05/27/14; 786/110 - Done !

[Kenada]

Which of the following actions may be taken by a corporation’s board of directors without shareholder approval?

A. Dissolving the corporation.

B. Selling substantially all of the corporation’s assets.

C. Purchasing substantially all of the assets of another corporation.

D. Amending the articles of incorporation.

I have another one…

I know it can't be A or D that you need shareholders for that. I picked C just because when I looked at B – i really doubt you can sell all the assets. Isn't that like liquidating the company?

FAR 05/27/14; 786/110 - Done !

[stoleway]

C is correct because BOD cannot sell a substancial assets of the corporation without shareholders approval. Selling all the assets of a corporation virtually means that the BOD are taking a unilateral or indirect action in liquidating or dissolving the entity without shareholder(owners approval) . But note that BOD takes governance and management decisions on behalf of the shareholders. BOD needs shareholders approval in major acquisitions and mergers,but buying substancial assets of another company might be as a result of ordinary course of business, auction or a bankrupt company putting up its assets for sale in order to liquidate.

This is my opinion but there might be better explanations to this as well.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

C is correct because BOD cannot sell a substancial assets of the corporation without shareholders approval. Selling all the assets of a corporation virtually means that the BOD are taking a unilateral or indirect action in liquidating or dissolving the entity without shareholder(owners approval) . But note that BOD takes governance and management decisions on behalf of the shareholders. BOD needs shareholders approval in major acquisitions and mergers,but buying substancial assets of another company might be as a result of ordinary course of business, auction or a bankrupt company putting up its assets for sale in order to liquidate.

This is my opinion but there might be better explanations to this as well.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[svwCPA72]

When you guys rewrite your notes or Ninja Notes, do you actually us pen and paper or do you do it on the computer in Word? For the last couple of tests I have taken, I was typing Ninja notes in Word instead of pen and paper which I didn't pass. I type pretty fast so I feel like I would get the same results as if I was writing on paper. Any thoughts?

BEC: 80(8/10) expired, 77(10/14)!!!
FAR: 79(11/10) expired, 80(8/14)!!!
REG: 66(7/11), 70(1/12), 70(4/12), 73(10/13), 79(5/14)!!
AUD: 43(8/11), 64(10/11), 65(2/12), 69(7/12) 64(10/12), 73(5/13), 64(7/13), 84(11/13)!!! Thank you Another71 for your help!

Becker, Ninja Notes, Audio, Flashcard and Wiley test bank
Yaeger and Wiley book for Audit

I AM DONE!!!!

[svwCPA72]

When you guys rewrite your notes or Ninja Notes, do you actually us pen and paper or do you do it on the computer in Word? For the last couple of tests I have taken, I was typing Ninja notes in Word instead of pen and paper which I didn't pass. I type pretty fast so I feel like I would get the same results as if I was writing on paper. Any thoughts?

BEC: 80(8/10) expired, 77(10/14)!!!
FAR: 79(11/10) expired, 80(8/14)!!!
REG: 66(7/11), 70(1/12), 70(4/12), 73(10/13), 79(5/14)!!
AUD: 43(8/11), 64(10/11), 65(2/12), 69(7/12) 64(10/12), 73(5/13), 64(7/13), 84(11/13)!!! Thank you Another71 for your help!

Becker, Ninja Notes, Audio, Flashcard and Wiley test bank
Yaeger and Wiley book for Audit

I AM DONE!!!!

[Skrier]

@svwCPA72…I personally rewrite my notes with pen and paper, but that is a preference for me. I keep a legal pad next to me at all times to jot down any notes for items I am confused on or explanations for questions I get wrong in the software. It is just easier for me to rewrite them by hand, and I think I absorb the information better. But that is me 🙂

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Author]

Replies