Directors/Officers/Shareholders Flashcards
The ____ has general responsibility for the management of the business
and the affairs of the corporation.
BOD
T/F
A director must be a resident of the state where the corp. is
False
The directors are elected at the first annual meeting of the ____
shareholders
T/F
A director may resign at any time without written notice
False, must deliver written notice
T/F
Directors may only be removed with cause
False, Directors may be removed with or without cause
If a quorum is present, resolutions being voted on will be deemed approved if approved by a
____ of directors present
majority
T/F
The board of directors is not expected to participate in the daily business affairs of the
corporation
True
Who does the BOD delegate management functions for DAILY business affairs to?
Officers
T/F
The board remains responsible for supervision of the officers despite the delegation of duty
True
Under the duty of care, what are the director’s duties?
1) a duty to act In good faith
2) a duty to act with the care that an ordinarily prudent person in a like position would
exercise under similar circumstances; and
3) a duty to act in a manner the directors reasonably believe to be in the best interests of the
corporation.
The directors also have a duty to disclose ____corporate information to other
members of the board
material
Under the duty of loyalty, what are the director’s duties?
A director owes a duty of loyalty to her corporation and will not be permitted to profit
at the expense of the corporation.
T/F
The board may set director compensation
True,
Unless the articles or bylaws
provide otherwise, the board may set director compensation
Officer’s duties are determind by the ___
Bylaws
The officers are agents of the corporation and receive their power to manage from
the _____
directors
An officer may act with ___ or ___ authority
Actual or apparent
An officer must carry out her duties in ____
in good faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner she reasonably believes to be in
the best interests of the corporation.
T/F
An officer does not have the power to resign at any time
False
T/F
An officer can only be removed with cause
False
____ are the ownrs. of a corporation
Shareholders
T/F
Shareholders are personally liable for the obligation of the corporations
False
T/F
Directors are personally liable for the obligation of the corporations
False
T/F
Officers are personally liable for the obligation of the corporations
False
T/F
At common law, shareholders have a right to directly control the day-to-day management of the corp.
False.
However, the MBCA also
allows a departure from the general rule: Shareholders may enter into agreements
concerning management of the corporation.
Even absent a ______ vesting direct control of the corporation in
shareholders, shareholders have indirect control over their corporation through
shareholder agreement
Shareholders have the right to elect ____
directors
T/F
Shareholders can only remove directors with cause
False
____ have the power to adopt,
amend, or repeal bylaws.
Shareholders
Changes to the fundamental structure of a corporation cannot be made without
the approval of the _____
shareholders
T/F
Shareholder approval is not required in cases of
merger, sale of corporate assets outside the ordinary course of business, dissolution, and for other extraordinary corporate matters.
False
A majority
of the votes entitled to be cast on the matter by a particular voting group will constitute a _____
Quorm
Officers are appointed by the ____
board of directors
Officers may be removed by the ____
board of directors
Officers have ____ ____ given by the board, articles, and bylaws
actual authority
Officers have ___ to do whatever someone in their position would
normally have authority to do
apparent authority
a director has a duty to prevent corporate ____
waste
