Business Law- Chapter 37 Flashcards

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1
Q

Annual Shareholders’ Meeting

A

A meeting of the shareholders of a corporation that msut be ehld by the corporation to elect directors and to vote on other matters.

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2
Q

Special Shareholders’ Meetings

A

Meetings of shareholders that may be called to consider and vote on important or emergency issues, such as a proposed merger or amending the articles of incorporation.

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3
Q

Proxy

A

A written document that sharholder signs, authorizing another person to vote on his or her shares at the shareholders’ meeting in the event of the shareholder’s absence.

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4
Q

Record Date

A

A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders’ meeting.

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5
Q

Quorum

A

The required number of shares that must be represented in person or by proxy to hold a shareholders’ meeting. The RMBCA establishes a majority of outstanding shares as a quorum.

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6
Q

Straight Voting

A

A system in which each shareholder votes the number of shares she owns on candidates for each of the positions open.

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7
Q

Cumulative Voting.

A

A system in which a shareholder can accumulate all of her votes and vote them all for one candidate or split them amont several candidates.

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8
Q

Supramajority voting requirement.

A

A requirement that a greater than majority of shares constitutes a quoum of the vote of the shareholders.

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9
Q

Voting Trust

A

An arrangement in whihc the shareholders transfer their stock certificate to a trusteewho is empowered to vote the shares.

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10
Q

Shareholder Voting Agreement

A

An agreement between two or more shareholders that stipulates how they will vote their shares.

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11
Q

Right of First Refusal

A

An agreement that requires a selling shareholder ot offer her shares for sale to the other parties to the agreement before selling them to anyone else.

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12
Q

Buy-and-Sell Agreement

A

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement.

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13
Q

Preemptive Rights

A

Rights that give existing shareholders the option of subscribing to new shares being issued in proportion to their current ownership interests.

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14
Q

Annual Report

A

A report provided by shareholders that contains a balance sheet, an income statement, and a statement of changes in shareholder equity.

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15
Q

Dividend

A

A distribution of profits of the corporation to shareholders.

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16
Q

Stock Dividend

A

Additional Shares of stock distributed as a dividend.

17
Q

Derivative Lawsuit

A

A lawsuit a shareholder brings agains an offending party on behalf of a corporation when the corporation fails to bring the lawsuit.

18
Q

Piercing the Corporate Veil

A

A doctrine that states that if a shareholder dominates a corporation and uses it for improper purposed, a court of equity can disregard the corporate entity and hold the shareholder personally liable for the corporation’s debts and obligations.

19
Q

Board of Directors

A

A panel of decision makers who are elected by the shareholders

20
Q

Inside Director

A

A member of the board of directors who is also an officer of the corporation.

21
Q

Outside Director

A

A memeber of a board of directors who is not an officer of the corporation.

22
Q

Quorum

A

The number of directors necessary to hold a board meeting or transact business of the board.

23
Q

Officers

A

Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation.

24
Q

Duty of Obedience

A

A duty that directors and officers of a corporation have to act within the authority conferred upon them by state corporation codes, the articles of incorporation, the corporate bylaws, and the resolutions adopted by the board of directors.

25
Q

Fiduciary Duties

A

The duties of obedience, care and loyalty owed by directors and officers to their corporation and its shareholders.

26
Q

Dury of Care

A

A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation.

27
Q

Negligence

A

Failure of a corpoate director or officer to exercise the duty of care while condcting the corpoation’s business.

28
Q

Business Judgement Rule

A

A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment.

29
Q

Duty of Loyalty

A

A duty that directors and officers have not to act adversly to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders.