Overview Flashcards
What are the consequences for a corporation that does not timely file its annual report?
May be subject to dissolution, cannot sue or defend itself from a law suit
Required info in annual report
- name,
- date of incorporation,
- principal office location,
- tax identification number, and
- the names and addresses of all principal officers and directors and the registered agent.
True of False: Unless the articles of incorporation specifically provide otherwise, shareholders do not have preemptive rights when a corporation issues stock.
True
True or false: The power to issue stock lies solely with the board of directors unless the articles of incorporation specifically provide otherwise.
True
Valuation of consideration in issuance of stocks
The board of directors must determine that the consideration received for the stock is adequate. Once the board makes such a determination, the adequacy of the consideration is not subject to challenge.
When a person has entered into a pre-incorporation subscription agreement to purchase stock in a corporation to be formed in the future, the corporation, after making a _______ _______ on the subscriber to pay for the stock and waiting at least _____ days for payment, _____ sell the stock to someone else.
written demand; 20; may
Personal liability of a director during a wrongful distribution
A director who votes for or assents to an unlawful distribution in violation of the director’s duty of care is personally liable to the corporation for the amount of the distribution in excess of the lawful amount. A director is treated as having assented to an action taken by the board if the director is present at the meeting at which the board approved of the action and fails to ensure that her abstention from the specific action is noted in the minutes of the meeting.
The notice for a special shareholders’ meeting must state the _________ of the meeting.
purpose
Notice for meetings must be given no fewer than____ days or no more than _____ days before the meeting date.
10 ; 60
Content requirements for notice of meetings
The notice must include the time, date, and place of the meeting, and for a special meeting, the purpose of the meeting. Unless the articles of incorporation require otherwise, the notice of an annual meeting generally need not include the purpose or purposes of the meeting. However, even if the meeting is a regular meeting, if a purpose of the meeting is to vote on a merger, then the notice of the meeting must say so.
The plaintiff in a derivative action must generally make a demand to obtain action by the board of directors before filing suit. A derivative action generally may not commence until at least _____days have passed since the date of demand.
90
A ________ is the combination of two or more corporations such that only one corporation survives. The surviving corporation may be created as a result of the merger, rather than existing before the merger, in which case the process is referred to as a ___________.
merger ; consolidation
To merge:
i) The board of directors for each corporation must approve of the merger;
ii) The shareholders of each corporation must usually approve of the merger; and
iii) The required documents (e.g., plan of merger, amended articles of incorporation) must be filed with the state
When a corporation has issued stock, it may voluntarily dissolve if
(i) the board of directors adopts a proposal for the dissolution of the corporation, and
(ii) the majority of shareholders approve.
A shareholder in any corporation may pursue the involuntary dissolution of the corporation if:
i) The directors are deadlocked in the management of the corporation’s affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered; or
ii) The shareholders are deadlocked in voting power and have failed to elect successors to the directors whose terms have expired or would have expired on the qualification of their successors.
