Exam 28: The Internal Affairs of Corporations

Martin is a newly elected director of the Alliance Corporation. After being told of what would be expected of him, he is not sure he wants the position. However, upon investigating, he finds out that the only thing he will be liable for is

The duties of a director are primarily to

Jacob is a minority shareholder in a closely held corporation. Recently he was dismissed from his marketing management position and now the board of directors is stopping him from transferring his stock to a cousin. He has

The first directors of a corporation hold office until the first meeting of the shareholders of the corporation.

Explain how a proxy is used?

Which of the following best describes the appraisal remedy?

Directors owe duties to:

The winding up (the dissolution) of a corporation can be required by a court in order to rescue a

In a distributing public company, auditors are appointed by:

What are pre- emptive rights?

Dan is a director of a corporation, and without disclosing his conflict of interest, entered into a contract to supply the corporation with widgets. The contract was made in the name of his mother so that the corporation would not know that Dan was involved. Pat is a minority shareholder in the corporation, has found out about the conflict, and intends to bring a derivative action against Dan. Explain what a derivative action is. Why is a derivative action appropriate in the circumstances? What must Pat show in order to bring a derivative action? What remedy might a court award?

Jack is a director of Metallica, a construction corporation. During the course of his work as director of the corporation, Jack learns that the government is about to ask for tenders for the construction of a highway. If Jack resigns from his position as director, sets up a new corporation that successfully bids for the government contract, he will not be in breach of his duty as a director.

What is the difference between the business of a corporation and the affairs of a corporation?

Insider trading refers to the practice whereby an officer of a corporation sells company secrets to a rival corporation.

Which of the following is not a right of the shareholders of the corporation?

The CEO of a corporation is

Explain why most corporations issue pre- emptive rights on their new issues of stock when pre- emptive rights are generally not recognized by courts in Canada?

If a shareholder is unhappy about the way the corporation is being run, describe the major ways the shareholders can obtain information about and exercise control over the corporation.

Explain what it means for a director to give the corporation the right of first refusal? Give an example.