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1Do shareholders have any rights as a result of owning corporate stock?
Do shareholders have any rights as a result of owning corporate stock?2Are corporations required to hold shareholders’ meetings?
Are corporations required to hold shareholders’ meetings?3May shareholders consent to act without a meeting?
May shareholders consent to act without a meeting?4Are shareholders entitled to advance notice of shareholders’ meetings?
Are shareholders entitled to advance notice of shareholders’ meetings?5Corporations must give notice of special and annual shareholders’ meetings to which shareholders?
Corporations must give notice of special and annual shareholders’ meetings to which shareholders?6What are the two ways that a shareholder may waive a corporation’s failure to properly provide notice of a shareholders’ meeting?
What are the two ways that a shareholder may waive a corporation’s failure to properly provide notice of a shareholders’ meeting?7A corporation’s shareholder received notice of an upcoming special shareholders’ meeting. The shareholder attended the meeting, said nothing, and v...
A corporation’s shareholder received notice of an upcoming special shareholders’ meeting. The shareholder attended the meeting, said nothing, and voted on all matters. However, the shareholder was outvoted on some key issues. The following week, the shareholder realized that the meeting’s notice had not been timely. Can the shareholder now challenge the validity of the actions taken at the meeting because the meeting was defectively noticed?8Must a shareholder hold a corporation’s shares as of the record date to be entitled to vote at a shareholders’ meeting?
Must a shareholder hold a corporation’s shares as of the record date to be entitled to vote at a shareholders’ meeting?9In the context of a shareholders’ meeting, what is quorum?
In the context of a shareholders’ meeting, what is quorum?10What is straight voting?
What is straight voting?11In the context of shareholders voting for directors, what is cumulative voting?
In the context of shareholders voting for directors, what is cumulative voting?12What are the requirements for cumulative voting?
What are the requirements for cumulative voting?13How many votes per share are shareholders permitted?
How many votes per share are shareholders permitted?14Some shareholders of a corporation wished to vote cumulatively to elect directors at the annual shareholders’ meeting. The articles of incorporatio...
Some shareholders of a corporation wished to vote cumulatively to elect directors at the annual shareholders’ meeting. The articles of incorporation did not provide for cumulative voting. However, the shareholders gave the corporation notice of their intent to vote cumulatively, and the meeting notice stated that shareholders would be voting cumulatively. May the corporation’s shareholders vote cumulatively at the annual shareholders’ meeting?15What is a voting trust?
What is a voting trust?16What is a voting agreement?
What is a voting agreement?17What is a voting proxy?
What is a voting proxy?18What is a proxy contest?
What is a proxy contest?19Does a shareholder have a right to inspect and copy the corporation’s official records at its principal office?
Does a shareholder have a right to inspect and copy the corporation’s official records at its principal office?20Does a shareholder have a right to inspect and copy corporate records that are not kept at the corporation’s principal office?
Does a shareholder have a right to inspect and copy corporate records that are not kept at the corporation’s principal office?21May a corporation’s articles of incorporation or bylaws abolish its shareholders’ right to inspect and copy the corporation’s official records?
May a corporation’s articles of incorporation or bylaws abolish its shareholders’ right to inspect and copy the corporation’s official records?22A shareholder wanted to review the minutes from a corporation’s last three shareholders’ meetings. The shareholder made an official, written reques...
A shareholder wanted to review the minutes from a corporation’s last three shareholders’ meetings. The shareholder made an official, written request to the administrative assistant to the board of directors to inspect the documents in three weeks. However, the corporation’s articles of incorporation state that shareholders do not have the right to inspect corporate records. The assistant told the shareholder that he was not allowed to view the minutes. Is the shareholder entitled to inspect the corporation’s minutes of the shareholders’ meetings?23What are shareholder agreements?
What are shareholder agreements?24What are the two methods for forming shareholder agreements?
What are the two methods for forming shareholder agreements?25Must a shareholder agreement be noted conspicuously on either a share’s certificate or its information statement?
Must a shareholder agreement be noted conspicuously on either a share’s certificate or its information statement?26Are there any limitations on the subjects that shareholder agreements may address?
Are there any limitations on the subjects that shareholder agreements may address?27Generally, if there is a conflict between a shareholder agreement formed by a corporation’s shareholders and statutory law, which authority governs?
Generally, if there is a conflict between a shareholder agreement formed by a corporation’s shareholders and statutory law, which authority governs?28May shareholders of a corporation enter into a shareholders’ agreement that eliminates the board of directors?
May shareholders of a corporation enter into a shareholders’ agreement that eliminates the board of directors?29Do shareholders have fiduciary duties?
Do shareholders have fiduciary duties?30Are shareholders personally liable for the acts or debts of the corporation in which they own shares?
Are shareholders personally liable for the acts or debts of the corporation in which they own shares?31What is a corporate board of directors?
What is a corporate board of directors?32How often is a typical board of directors elected?
How often is a typical board of directors elected?33May a director resign at any time?
May a director resign at any time?34May shareholders of a corporation remove directors without cause?
May shareholders of a corporation remove directors without cause?35A corporation’s majority shareholder and a director had a personality conflict. After a confrontation between the majority shareholder and the dire...
A corporation’s majority shareholder and a director had a personality conflict. After a confrontation between the majority shareholder and the director at a meeting, the majority shareholder demanded that the board call a special meeting to hold a shareholder vote to remove the director. The director insisted that a director could be removed only for cause, and that there was no good cause to remove him. The articles of incorporation did not address whether the corporation’s directors could be removed without cause, and there was no law in the jurisdiction that required a finding of good cause in this situation.May the shareholders vote to remove the director without cause?36A court must make what two findings before a corporation’s director may be removed through a judicial proceeding?
A court must make what two findings before a corporation’s director may be removed through a judicial proceeding?37May corporate directors hold meetings?
May corporate directors hold meetings?38How much notice must a corporation give before holding a regular meeting of the corporation’s board of directors?
How much notice must a corporation give before holding a regular meeting of the corporation’s board of directors?39What are the two ways that a director of a corporation can waive the corporation’s failure to properly notice a directors’ meeting?
What are the two ways that a director of a corporation can waive the corporation’s failure to properly notice a directors’ meeting?40After an unfortunate event, a corporation’s shareholders became furious about the leeway the corporation gave to its directors in the articles of i...
After an unfortunate event, a corporation’s shareholders became furious about the leeway the corporation gave to its directors in the articles of incorporation. The chairman of the board called for a special meeting to take place the next morning, and notice of the meeting was distributed. All directors attended. At the meeting, a majority of directors voted to amend the articles of incorporation in a certain way, but several directors voted against the amendment. Many of the dissenting directors believed that they did not have enough time to prepare to advocate their positions adequately. The next week, the dissenting directors learned that special meetings must be preceded by at least two days’ notice.Can these directors now object to the vote because they received defective notice of the special meeting?41In the context of a meeting of a corporation’s board of directors, what is a quorum?
In the context of a meeting of a corporation’s board of directors, what is a quorum?42Under the MBCA, if a corporation has a fixed board size, what is the default rule for how many directors must be present to establish a quorum at a...
Under the MBCA, if a corporation has a fixed board size, what is the default rule for how many directors must be present to establish a quorum at a meeting of the corporation’s board of directors?43Under the MBCA, if a corporation has a variable board size, what is the default rule for how many directors must be present to establish a quorum a...
Under the MBCA, if a corporation has a variable board size, what is the default rule for how many directors must be present to establish a quorum at a meeting of the corporation’s board of directors?44May a corporate board of directors create committees?
May a corporate board of directors create committees?45Is a director presumed to assent to any actions approved at a meeting merely by present at the meeting?
Is a director presumed to assent to any actions approved at a meeting merely by present at the meeting?46At a meeting of a corporation’s board of directors, a director of the corporation voted to approve a specific course of action. As the meeting prog...
At a meeting of a corporation’s board of directors, a director of the corporation voted to approve a specific course of action. As the meeting progressed, the director thought more about the action and became concerned it might be a breach of a fiduciary duty, which would create personal liability for him. To try to avoid this potential personal liability, the director decided to dissent to the action. Accordingly, immediately after the meeting, the director delivered a written notice of dissent to the corporate officer who had presided over the meeting.May the director still be held personally liable for any breach of a duty related to the approved course of action?47What is insider trading?
What is insider trading?48To police insider trading, what specific conduct does Rule 10b-5 of the Securities Exchange Act of 1934 prohibit?
To police insider trading, what specific conduct does Rule 10b-5 of the Securities Exchange Act of 1934 prohibit?49Does a person have to be a corporate insider to be criminally liable for insider trading?
Does a person have to be a corporate insider to be criminally liable for insider trading?50A corporate officer was tasked with handling some the documents related to the corporation’s confidential acquisition of a competitor. The officer ...
A corporate officer was tasked with handling some the documents related to the corporation’s confidential acquisition of a competitor. The officer knew she could not trade on the information herself without being caught. However, the officer told her husband about the acquisition, and he promptly acquired stock options in the competitor. Once the deal was announced, the husband sold his stock options for a $250,000 profit.Did the husband violate federal securities laws?51What is a short-swing profit?
What is a short-swing profit?52Does § 16(b) of the Securities Exchange Act of 1934 allow corporations to recover short-swing profits?
Does § 16(b) of the Securities Exchange Act of 1934 allow corporations to recover short-swing profits?53Must corporations have officers?
Must corporations have officers?54How are officers typically selected and removed?
How are officers typically selected and removed?55What authority do corporate officers have?
What authority do corporate officers have?56May a corporation ratify a director’s breach of a fiduciary duty?
May a corporation ratify a director’s breach of a fiduciary duty?57May an officer seek compensation from the corporation for damages incurred as a result of a breach of duty in her official capacity?
May an officer seek compensation from the corporation for damages incurred as a result of a breach of duty in her official capacity?58Who typically manages a limited liability company (LLC)?
Who typically manages a limited liability company (LLC)?59Does a member of a member-managed LLC owe any fiduciary duty to the company?
Does a member of a member-managed LLC owe any fiduciary duty to the company?60May an LLC’s operating agreement eliminate the duty of loyalty, the duty of care, or the obligation of good faith and fair dealing?
May an LLC’s operating agreement eliminate the duty of loyalty, the duty of care, or the obligation of good faith and fair dealing?61Are members of an LLC personally liable for the LLC’s debts or obligations?
Are members of an LLC personally liable for the LLC’s debts or obligations?62What governance rules does the Revised Uniform Limited Liability Company Act impose on member-managed LLCs?
What governance rules does the Revised Uniform Limited Liability Company Act impose on member-managed LLCs?63What is a manager-managed LLC?
What is a manager-managed LLC?64What governance rules does the Revised Uniform Limited Liability Company Act impose on member-managed LLCs?
What governance rules does the Revised Uniform Limited Liability Company Act impose on member-managed LLCs?65How are managers chosen in a manager-managed LLC?
How are managers chosen in a manager-managed LLC?66Several friends who were college students formed an LLC, making themselves members. The operating agreement specified that the LLC was manager-mana...
Several friends who were college students formed an LLC, making themselves members. The operating agreement specified that the LLC was manager-managed. The friends hired one of their professors as manager. The business did well, but some of the friends became unhappy when the professor gave them bad grades. The unhappy friends presented to the other members a proposal to remove the professor as manager. A majority of the members voted to remove the professor. The LLC’s operating agreement was silent about how to remove a manager. Having managed the LLC well, the professor was upset that he was being removed without cause.Was the vote removing the professor as the LLC’s manager valid?67Several friends formed an LLC and became its members. The operating agreement specified that the LLC was manager-managed, and the members hired som...
Several friends formed an LLC and became its members. The operating agreement specified that the LLC was manager-managed, and the members hired someone else to be the manager. One of the members learned about an attractive parcel of property for sale and submitted an offer for the parcel. The LLC was interested in the parcel and also submitted an offer. The LLC’s operating agreement was silent about whether the LLC’s members owed any fiduciary duties.Is the member who submitted the offer competing with the LLC in violation of the duty of loyalty?68Several friends formed an LLC and decided to run the company together, making the LLC a member-managed venture. The friends prided themselves on ma...
Several friends formed an LLC and decided to run the company together, making the LLC a member-managed venture. The friends prided themselves on making quick decisions without doing any research and agreed that they did not want to be bound by the duty of care. The friends inserted a provision into the LLC’s operating agreement that eliminated the duty of care for all members. Is the provision valid?69A group of friends formed a manager-managed LLC to remodel and sell an apartment building. The friends were all members of the LLC but selected som...
A group of friends formed a manager-managed LLC to remodel and sell an apartment building. The friends were all members of the LLC but selected someone else to be its manager. During the remodel, the eldest member learned that the building had asbestos. The eldest member did not tell anyone about the asbestos. When selling the building for the LLC, the eldest member filled out the necessary disclosure forms but did not mention the asbestos. This was a tortious material misrepresentation. The building’s buyer learned about the asbestos and sued all the members personally for $50,000 to remediate the asbestos. The members argued that they were all protected by limited liability from any individual liability, and the buyer’s only recourse was against the LLC itself.May any of the LLC’s members be held personally liable for the buyer’s damages?70What is the test for whether mandatory indemnification applies, meaning that a corporation must indemnify a director?
What is the test for whether mandatory indemnification applies, meaning that a corporation must indemnify a director?71If mandatory indemnification does not apply, what is the test for whether the corporation may choose to indemnify the director in a civil proceeding?
If mandatory indemnification does not apply, what is the test for whether the corporation may choose to indemnify the director in a civil proceeding?72If mandatory indemnification does not apply, what is the test for whether the corporation may choose to indemnify the director in a criminal procee...
If mandatory indemnification does not apply, what is the test for whether the corporation may choose to indemnify the director in a criminal proceeding?