Exam 40: Corporate Directors, Officers, Shareholders

Reed owns one share of stock in SK8 Boards Corporation, as evidenced by a stock certificate. Reed loses the certificate. Reed's ownership of the stock is

Restrictions on the transfer of shares in a close corporation are usually void.

Misha and Nguyen are shareholders of Outsourcing Solutions, Inc. Misha's written authorization to Nguyen to vote her shares at a shareholders' meeting is

Godwin is a director on the board of Health Insurance Corporation. On the receipt of notice of a board meeting, Godwin attends the meeting and takes part in the discussion of business matters and votes on corporate issues. Godwin is entitled to be notified of, and to take part in, these meetings

In most states, an individual cannot hold more than one corporate office and be both an officer and a director of the corporation.

Lewis is a director of Mines & Refineries, Inc. Using information that is not available to the public, Lewis makes a profit trading in Mines & Refineries stock. Lewis is most likely li?able for breach of

Most states do not permit the corporate articles or bylaws to authorize compensation for directors.

Sophie and Tiny incorporate their beverage-container business as U-Twist Products, Inc. The first board of directors may be appointed by the firm's

Shareholders own the corporation, and they have legal title to corporate property.

Char and Doug are officers of Eden Cruise & Travel Corporation. As cor?porate officers, the rights of Char and Doug are

In most states, a director cannot be removed without cause unless the shareholders have reserved the right to do so at the time of election.

Donatello is a director and officer of Enzio's Pizza Corporation. Donatello selects an ad campaign that consumers find offensive-a market?ing decision that results in a dramatic decrease in profits for the firm and its shareholders. The shareholders accuse Donatello of breaching his fiduci?ary duty to the corporation. What is Donatello's best defense against this ac?cu?sation? Later, a resolution comes before Enzio's board to expand its menu to compete with Fabio's Pasta Palace Restaurants Inc. Donatello is a director and shareholder of Fabio's. What is Donatello's responsibility in this situation?

A straight majority vote of the shares represented at a shareholders' meeting is usually required to pass resolutions.

Orsa is a shareholder in Pickles & Preserves Corporation. In some states, Orsa may be liable to the firm's creditors for unpaid corporate debts if she

Renee is a director of Sharp Focus Lens Corporation. With respect to Sharp Focus, Renee can access the corporation's books and records. Renee has this access under

Directors cannot use corporate funds or confidential corporate information for personal advantage.

A court will dismiss a derivative suit if a majority of the directors or an independent panel determines in good faith that the lawsuit is not in the best interests of the corporation.

A director who does not hold a management position in the corporation is an outside director.

Kelly transfers shares of stock that she owns in Lone Starz Company to Max. A shareholders' meeting takes place before Max's ownership is entered in Lone Starz's stock book. A vote at the meeting can be cast by

Normally, a corporate board of directors appoints itself as the first board at the time the corporation is created.