John and Two Friends Incorporated a Closely Held Corporation

John and two friends incorporated a closely held corporation. Each bought an equal number of common shares in the corporation. Each became a director, an officer, and an authorized agent of the corporation. Which of the following is true?

A) As director, each owes a fiduciary duty to the creditors of the corporation.
B) The corporation is more highly regulated and less free of government regulations and control than a broadly held corporation would be.
C) Each of them, as directors, owe a fiduciary duty to each of the others, as shareholders.
D) Since the corporation is a legal fiction, all of its activities must be carried out through principals.
E) If the affairs of the corporation are being conducted in a manner that is unfairly prejudicial to any one shareholder, that shareholder could seek relief from such oppression from the courts.

Correct Answer:

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