MEE Rules Review Flashcards
What are a shareholder’s rights as it relates to a corporations books and records?
Shareholders have a right to inspect their corporation’s books a records for a proper purpose.
How can a shareholder assert their right to inspect their corporation’s books and records?
A shareholder must give the corporation five days advance notice and state the reason for the inspection.
Can a shareholder bring anyone with them to the inspection?
Yes. A shareholder can bring an attorney, accountant or agent to inspect the records.
What are the differences between derivative shareholder actions and direct shareholder actions
Derivative shareholder actions→ Shareholder is addressing wrongs done to the corp. Must make a demand on the corp. before asserting this action.
Direct Shareholder action→ is enforcing duties owed to shareholder. Do not need to make a demand on corp. first.
Do shareholders have a right to receive dividends?
Generally, no.
When can dividends be declared?
When the board of directors declare one. It is in their sound discretion to declare it.
Can a shareholder challenge the board’s failure to declare a dividend?
Yes, but they have the burden of proving the board acted in bad faith. Generally, the Court will not disturb the board’s decision if it’s done in good faith.
Who can vote in a shareholder meeting?
Shareholders of record
When are proxy agreements irrevocable?
When the proxy agreement is coupled with an interest (such as a security interest or sale of shares).
How many votes are needed for a quorum?
Unless the Art. of Inc. or bylaws say otherwise you need a majority of outstanding shares entitled to vote for a quorum.
How many votes are needed to elect a director?
Unless the Art. of Inc. or bylaws say otherwise, a director is elected by plurality of the votes.
What is the Business Judgement Rule?
It is the presumption that the directors acted (1) in good faith, (2) with the care of an ordinarily prudent person in like position would exercise and (3) reasonably believed to be in the best interest of the corp.
What is a director’s duty of care?
A director has a duty to act in good faith, with the care that a ordinarily prudent person in like circumstances would exercise and under the reasonable belief that their action is in the best interest of the corporation.
In exercising due care who or what can a board director rely on?
A director can rely on reports from officers whom the directors find reliable and competent and outsiders about matters the director reasonably believes is within the outsider’s profession expertise.
What is a director’s duty of loyalty
It is their duty to avoid profiting at the expense of the corporation (self-dealing)
If a director self-deals can the transaction be cured?
Yes, if the interest director discloses all material facts and is approved by the majority of disinterested directors or shareholders OR the deal is fair.
What actions would constitute a fundamental change?
sale of all assets in a corp. when it’s not done in the ordinary course of business.
How can a fundamental change of corp. be valid?
The directors must pass a resolution for the shareholders to vote on. Then shareholders have a meeting to decide whether to approve it.
How many directors are needed for a director meeting
a quorum of the directors.
If a shareholder disapproves of a fundamental change what is the shareholder’s recourse
The shareholder can force the corp. to buy their shares (a.k.a.) appraisal rights.
How can a shareholder assert their appraisal rights?
The shareholder must (1) file an objection with the corp. before the shareholder meeting about the fundamental change, (2) not vote in favor of the resolution and (3) deposit their shares with the corp.
What happens if a dissenting shareholder and Corp. cannot agree on the fair market value of dissenting holder’s shares?
The corp. must file an action with the Court to determine the fair market value.
In a conflict between the Articles of Incorporation and By-laws, which prevails?
Articles of Incorporation
When will exculpatory clauses not protector board members
the director received a benefit that they were not entitled to, intentionally harmed the corp. or shareholders, approved unlawful distributions or intentionally committed a crime
Where is the right against Double Jeopardy Derived from?
The 5th Amendment
What does Double Jeopardy preclude?
D from being prosecuted for the same offense?
When does Double Jeopardy attach?
In a jury trial→ when the jury is empaneled
In a bench trial→ when the first witness is sworn in.
When are crimes not considered the same offense for Double Jeopardy purposes?
When each crime requires proof of an additional element that the other does not.
If a state law allows D’s maximum sentence to be increased upon a showing of additional facts, to whom must these facts be submitted to and what is the prosecutor’s burden relating to them
The prosecutor must submit these additional facts to a jury and prove these facts beyond a reasonable doubt.
What is the key difference between larceny by false pretenses and larceny by trick.
Title must pass for the crime to be considered larceny by false pretenses.
What is commercial puffery
mere statements of opinion rather than fact (often includes superlatives like “best”).
Can larceny by false pretenses be based on commercial puffery?
No.
What is larceny by false pretenses
- It is obtaining title
- To personal property of another
- By an intentional false statement of another
- With the intent to defraud the other.
How can the intentional false statement element of false pretenses be established?
By proof that D was aware of the high probability that the statement was false and made the deliberate decision to avoid the trust.
How can the intent to defraud element of false pretenses be established?
By establish and intent for the victim to rely on the statement.
How many days advance notice is a direct entitled to get for a special meeting?
Two days advance notice unless the article of incorporation says otherwise.
What does a notice for special board of directors meeting include
information about the time, location, and date of the meeting. It does not need to have information about the purpose of the meeting.
When is a board director legally present at board meeting?
When they can ““may simultaneously hear each other during the meeting”
What must a director who received inadequate notice of a special meeting do?
Object to holding the meeting and not vote on the resolution.
What happens if a director attends and votes at special meeting which they were not given adequate notice for?
The director waives their right to object to the special meeting.
What are the three ways in which evidence of subsequent remedial measures can be used?
- To show ownership and control
- To rebut a claim that the precaution was not feasible or
- prove that the opposing party has destroyed the evidence.
Must an agreement for someone to act as an agent to sign land contract on their behalf be in writing?.
Yes. If the agent is signing a land contract on behalf of their principal. The agency appointment must be in writing. Note: This is assuming that the principal is the party to be bound.
Can a tortfeasor seek contribution from a co-tortfeasor, if that tortfeasor settles with plaintiff.
No. By getting a release of liability (i.e. settling), the tortfeasor waives the right to seek contribution.
What are the pre-charge requirements for a line up?
It cannot (1) be overly and unnecessarily suggestive and
(2) the procedures employed must not result in a substantial likelihood of misidentification
Does negligence per se apply on only to criminal statutes?
No, it applies to civil statutes too!
What is the implied condition to every contract?
There is an implied condition to act in good faith and deal fairly.
What is a necessary component of third party actions? (civil law not contracts)
It must arise out of the same transaction or occurrence.
