Part 2

Question 1

When the Right of Appraisal May Be Exercised (sec 80)

Answer 1

(a) In case an amendment to the articles of incorporation

(b) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets

(c) In case of merger or consolidation

(d) In case of investment of corporate funds for any purpose other than the primary purpose of the corporation.

Question 2

What is Derrivative Suit?

Answer 2

lawsuit brought by a shareholder or group of shareholders on behalf of the corporation against the corporation’s directors, officers, or third parties who breach their duties.

Question 3

Requirement to File Derrivative Suit

Answer 3

The party bringing suit should be a shareholder as of the time of the act or transaction complained of, number of his share not being material

Question 4

Who are liable for watered stocks?

Answer 4

(a) consents to the issuance of stocks for a consideration less than its par or issued value;
(b) consents to the issuance of stocks for a consideration other than cash, valued in excess of its fair value; or
(c) having knowledge of the insufficient consideration, does not file a written objection with the corporate secretary,