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Bar Exam (Next Generation) Flashcards: Officer And Director Liability Mbca 2016

Study Officer And Director Liability Mbca 2016 in Bar Exam (Next Generation) with focused flashcards that help you recognize the idea, recall the key rule, and apply it in practice-style prompts.

QUESTION

Under MBCA 6.40, when is a distribution to shareholders prohibited?

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ANSWER

When afterward it could not pay debts as they come due, or its assets would be less than liabilities plus preferences. These are the equity insolvency and balance sheet tests.

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Bar Exam (Next Generation): Business Associations and Relationships

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This deck focuses on Officer And Director Liability Mbca 2016, giving you a quick way to review the definitions, rules, and examples that matter most for Bar Exam (Next Generation).

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Practice questions

1 of 12Practice questions for this set
Beacon Corp's articles contain the broadest provision permitted by the MBCA eliminating director monetary liability. Despite knowing that Beacon had no lawfully available surplus, all three directors voted for a $2 million dividend. The dividend was paid. A derivative action seeks to hold the directors personally liable. Under the MBCA, what result?
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