Shareholder's Rights Flashcards
Derivative Lawsuit
Lawsuit brought by s/h on behalf of corporation
Derivative Lawsuit Requirements
Must own at least 1 share when claim arose AND continue to own at least one share throughout litigation
S/H must fairly and adequately represent the corporation’s interest
Demand must be made on directors
Demand on Directors
Demand must be made on the directors before a lawsuit can commence. Either after it has been made and rejected or 90 since the demand was made
S/H Right to Vote
Only the record date owner votes. Cutoff typically 10-60 days before meeting
S/H Voting Methods
In person
Proxy- in writing, signed by record owner, sent to secretary, authorizing someone else to vote for you, valid up to 3 years
Can Proxy be revoked?
Yes, unless labeled irrevocable and coupled with an interest
S/H Meeting
Must have annual meeting where at least one director is up for election
Notice must include time and place
Special S/H Meeting
Vote on proposal or fundamental corporate change
Notice must include the meeting’s special purpose
Quorum S/H Meeting
Majority of all shares represented at meeting start
Focus on shares not people
S/H Votes
Votes in favor must exceed votes against
Voting Trust
Formal delegation in writing of voting power given to trustee for up to 10 years and must be filed with the corporation
Agreement to Vote Shares
Written agreement to vote shares similarly
Traditional Voting
Vote # share in each election
Cumulative Voting
shares x open slots, can vote all shares in one election
Voting Presumption
Traditional, cumulative voting must be expressly granted in the A of Inc.
