Exam 40: Corporate Directors, Officers, Shareholders

Aviators Source Corporation makes and sells aircraft parts. In most states, the minimum number of directors that must be present before Aviators Source's board could transact its business is

Kiefer, Lori, and Moira are shareholders of Nationmade Flags & Banners Corporation. Before a shareholders' meeting, they agree in writing to vote their shares together in a certain manner. Usually, such agreements are held to be

A director or officer is liable to the corporation or its shareholders for honest mistakes of judgment and bad business decisions.

Farrah and Grant are shareholders of Hong Kong Restaurants, Inc. As shareholders, they must approve

Each director can access the corporation's facilities and premises.

Lovey is a shareholder of Made-2-Order Manufacturing Corporation with preemptive rights. With these rights, Lovey can

Directors are prevented from ever having financial dealings with the corporations they serve.

Rafi, a director of Super Service Station Corporation, does not attend a board meet?ing for three years. During that time, Twyla, Super's president, makes improper loans that cost the company $100,000. Rafi is most likely

Nelson is Organic Coffee Company's majority shareholder. Nelson decides to sell his Organic Coffee stock. The sale will be an effective transfer of the control of the company. Does Nelson owe a duty to Organic Coffee or its minority shareholders in this situation?

Shareholders have the power to vote to elect or remove members of the board of directors.

Directors and officers must subordinate the welfare of the corporation to their personal interests.

Alain is chairman of the board of Barber & Beauty Supply Corporation. Consuela, a con?sumer, is injured while using a Barber & Beauty product. She sues Barber & Beauty and Alain individu?ally. The corporation may pay Alain's legal fees under

Preemptive rights permit a director to veto, or "preempt," any proposal that the shareholders have voted to approve or disapprove.

Mieko is a shareholder of Natural Gas, Inc. Natural Gas uses cumulative voting to elect directors. This means that the number of Mieko's votes is determined by the number of

Eloise is a director for Frozen Yogurt Company. Eloise is also a director for Gelato Desserts, Inc. When the board of Frozen Yogurt considers entering into a contract with Gelato Desserts, Eloise must

Each director present at a meeting of the board of directors has one vote for each outstanding share of corporate stock that he or she holds.

Merina and Nelli form Orchids, Inc. Ultimate responsibility for pol?icy decisions necessary to the management of corporate affairs rests with Orchids's

The board of directors normally can remove a corporate officer at any time with or without cause.

Dionne is an officer of Event Ticketing, Inc. As an officer, with respect to the corporation, Dionne is

Tucker is a director of USA Auto Parts, Inc. Under the standard of due care owed by di?rectors of a corporation, Tucker's decisions must be