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Corporate Directors, Officers, and Shareholders

Egan is a director of First Realty Corporation. As a director, Egan can act as an agent to bind First Realty?

in no circumstances

Rhea is a director of Spex Corporation, which makes and sells sunglasses and other eyewear. As a Spex director, Rhea is?

not a trustee because Rhea does not hold title to Spex's property for the use and benefit of others

Lexy and Mort act as the incorporators for NuGame Corporation. After the first board of directors is chosen, subsequent directors are elected by a vote of NuGame's?


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?


Clifton is a director of Dri-Cleaning Corporation. In this capacity, Clifton has a right of?


Reba is a director of Superb Performance Corporation. Reba's rights, as a director, do not include a right of?


Rosa and Sean are directors of Tech, Inc. The right of Rosa and Sam to be notified of special meetings of the board is the right to?


Flite-Craft Corporation makes and sells aircraft parts. In most states, the minimum number of directors that must be present before Flite-Craft's board can transact its business is?

a majority of the number authorized in the articles or bylaws

Sol is chairman of the board of Tasty Foods Corporation. Uma, a consumer, falls sick after eating a Tasty product. Uma sues Tasty, and Sol individually. Tasty may pay Sol's legal fees?

regardless of the outcome

The board of directors of Integral Components Corporation consists of Frida, Gayla, and Hart. A quorum is the minimum number of these directors?

who must be present to validly transact business

Frawsty Corporation distributes beverage in the greater Northwest. Frawsty's board of directors can delegate some of its functions to?

Frawsty's officers

Coast-to-Coast Distribution, Inc., is a direct-mail distribution company. Like most corporations, Coast-to-Coast's employees include its?


Cara and Dru are officers of EZ Trucking Corporation. As corporate officers, the rights of Cara and Dru are?

determined by their employment contracts

Nina is a director of Omega, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be?

informed and reasonable

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

liable for negligence or mismanagement

Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to Motor Parts in good faith, in what he believes is the firm's best interest, and without violating any duties owed to it. If, despite these circumstances, Luke exercises poor business judgment, under the business judgment rule Luke is?

immune from liability

Chip is a director of Diners Restaurants, Inc. Chip would breach his duty of loyalty if he?

buys a controlling interest in Gulpin' Foods Corporation, a competing firm

Eve is a director of Fab Stuff Corporation. Without informing Fab, Eve goes into business with GR8 Things, Inc., in competition with Fab. Eve is liable for breach of?

the duty of loyalty

Denise, Ervin, and Flem occupy the positions of directors on the board of Gallery Corporation. As directors, they may not?

support businesses that directly compete with Gallery

Brad is a shareholder of Concert Promotion Corporation. As a shareholder, Brad can?

vote to amend the articles of incorporation or bylaws

Niche Stores, Inc. must hold a shareholder's meeting?

once a year

Thor Power Products Corporation permits its directors to be elected by cumulative voting. This?

allows minority shareholders to be represented on the board

Odell, Prince, and Quinn are shareholders of Rite 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?

valid and enforceable

Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock certificate. Fiona loses the certificate. Her ownership of the stock is?

not affected

Lovey is a shareholder of Matchless Corporation with preemptive rights. With these rights, Lovey can?

buy a prorated share of a new issue of stock before other buyers

Ida, Jerzy, and Kit are the directors of Liberty Convenience Stores, Inc. Liberty has nine officers and forty-six shareholders. Dividends are ordered by the firm's?

board of directors

Rusty and Sylvia are shareholders of Triad Hotel Corporation. Triad's directors fail to declare a dividend. Rusty and Sylvia could succeed in asking a court to order the directors to meet and declare a dividend?

if withholding a dividend is an abuse of the directors' discretion

In all states, Sports Fitness Club Company and other corporations can pay dividends from?

retained earnings

Natalie is a shareholder of Off-Road Vehicle Company. As a shareholder, Natalie does not have?

a right to compensation

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?

Kelly only

Bea is a shareholder of Candy Confections Corporation. The right to inspect corporate books and records is?

held by Bea, with some restrictions

Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf.

Ray's suit is a shareholder's?

derivative suit

Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf.

Any damages recovered by Ray's suit will go to?


Orin is a shareholder of Pinkwater Corporation. In some states, Orin might incur personal liability for unpaid Pinkwater debts if he?

buys stock for less than its fair-market value

Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduciary duty to Donut Holes and its minority shareholders if he has?

a sufficient number of shares to exercise de facto control

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