Directors and Officers

Question 1

Board of Directors

Answer 1

Every corporation must have at least one member

Question 2

Who elects/removes BOD?

Answer 2

Shareholders elect/remove BOD with or w/o cause

Question 3

BOD must act with a meeting

Answer 3

Proper Notice

No proxy allowed

Question 4

Requirements of a BOD meeting

Answer 4

Quorum- majority of board present unless otherwise indicated in bylaws
Majority of BOD present must vote in favor to do something in order to act

Question 5

BOD Liabilities

Answer 5

Directors have a duty to manage the corporation and exercise a duty of care and duty of loyalty

Question 6

Business Judgement Rule

Answer 6

Directors are presumed to act in the best interest of the corporation

Question 7

Duty of Care

Answer 7

Directors must act with prudence

Question 8

Duty of Loyalty

Answer 8

Directors may not receive and unjust benefit to themselves to the detriment of the corporation or its stockholders

Question 9

Duty of Loyalty Defenses

Answer 9

Disclosure of all material facts AND a form of independent approval

Question 10

Necessary Members

Answer 10

President, Secretary, Treasurer

Question 11

When can directors indemnify

Answer 11

When the lawsuit is won
Settlements are permissive and can be granted through: majority vote, independent directors, independent s/h approval, lawyers reccomendation