Closely Held Firm Flashcards
what is the goal of shareholder agreements?
protection of minority shareholders
under MBCA, are vote pooling agreements enforceable?
yes
under MBCA, how long is a shareholder agreement valid?
10 years
when are proxies irrevocable?
when they are coupled with an interest
if a proxy is not coupled with an interest, when can it be revoked?
at any time
where must restrictions on the transferability of shares be noted?
on the front or back of the stock certificate
can a restriction affect shares issued before the restriction is adopted?
no, unless the holders vote in favor of the restriction
what must restrictions on transferability of shares serve?
a proper purpose
what is the test for if a restraint on transferability of shares is valid?
reasonableness
a completely arbitrary restraint on the transferability of shares is likely to be…
found unreasonable (ex. you can’t sell your shares to someone of a particular race)
who has the burden of proving the unreasonable restraint?
the person who is against the restraint
for classified shares, what must be specified in the charter?
rights, preferences, and limitations of that type of classification of stock
