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Exam 6: Corporate Directors, Officers, and Shareholders

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Question 21

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Many states permit a corporate board to have fewer than three directors.

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Question 22

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The articles of incorporation can exclude or limit shareholders' voting rights.

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Question 23

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As a general rule, shareholders are responsible for the daily management of a corporation.

Every shareholder is entitled to examine specified corporate records, but only in person, not through an agent.

A vacancy on the board of directors can be filled by the board itself.

The initial board of directors of a corporation is normally elected at the first annual shareholders' meeting by a majority vote of the shareholders.

The board of Management Consultants, Inc., can delegate some of its responsibilities to

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

Fact Pattern 6-1 Don is a shareholder of Energy Renew, Inc. When the directors fail to undertake an action to redress a wrong suffered by the corporation, Don files a suit on the firm's behalf. -Refer to Fact Pattern 6-1.Any damages recovered by the suit will normally go to

Bea transfers shares of stock that she owns in Coin Laundry Corporation to Dick. A shareholders' meeting takes place before his ownership is entered in the firm's stock book. A vote at the meeting can be cast by

Eve is a director of Fab Style Corporation. Without informing Fab, Eve goes into business with Gro Trend, Inc., in competition with Fab. Eve is most likely liable for breach of

As a corporation, Paper Products Company can pay dividends if

Security Insurance, Inc. has a board of five directors. Security's bylaws do not state any quorum requirements. In most states, a quorum for Security's board meetings would be

Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm's president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of

Elise is a director for Fro-Yo Inc. Elise is also a director for Gelato Ice, Inc. When Fro-Yo's board considers a contract with Gelato, Elise must

Pat owns one share of stock in Quik-Stop Stores, Inc., as evidenced by a stock certificate. Because stock is intangible personal property, Pat's ownership of the stock

Daryl, Elsa, and Ferris are the directors of Go Apps, Inc. Go also has four officers and fourteen shareholders. Dividends can be ordered by the firm's

Sheila is a shareholder of Travels & Trips Inc. She has the right to inspect corporate books and records

For shareholders to act during a shareholders' meeting, a quorum must be present.

A director or officer must act in good faith.