fundamental changes to corporation

Question 1

Who must approve fundamental changes of corporation?

Answer 1

BOTH shareholders AND directors

Question 2

Merger

Answer 2

Combination of two or more corporations where one corp survives and assumes ASSETS AND LIABILITIES of other corporation

Question 3

Consolidation

Answer 3

Combination of two corps in which NEITHER corporation survives

New entity is created and THAT entity assumes assets and liabilities of BOTH corporations

Question 4

Dissolution definition

Answer 4

Existence of corporation is extinguished by either the VOLUNTARILY by shareholders and directors OR involuntarily by disgruntled third parties

Question 5

Involuntary dissolution by creditors

Answer 5

Corporation may be dissolved involuntarily by creditors if creditors show corporation is NOT paying its debts

Question 6

Involuntary dissolution by shareholders: 3 scenarios

Answer 6

1) shareholders can show assets are being wasted
2) can show directors acting fraudulently OR
3) can show directors/shareholders are deadlocked

Question 7

Process for fundamental change

Answer 7

1) board must ADOPT A RESOLUTION proposing change

2) notice must be sent to shareholders of special meeting

3) majority of shareholders CASTING vote must vote IN FAVOR of fundamental change