Shareholders Flashcards

1
Q

Shareholder Right to Vote

A

Only shareholders that are registered shareholders on record date are entitled to vote at a shareholders meeting.

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2
Q

Record Date

A

Bylaws may fix or provide record date, but it cannot exceed 70 days prior to shareholder meeting

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3
Q

Voting Proxy

A

A shareholder may vote her shares at a shareholder meeting without physically attending the meeting through use of a proxy.

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4
Q

Valid Voting Proxy

A

A valid proxy must be signed on:
1) an appointment form, or
2) an electronic transmission

must be accepted on face if no reasonable grounds to deny

only valid for 11 months

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5
Q

Proxy Voting Power

A

An individual who is given power to vote shares by proxy must act in accordance with an agreement between the parties.

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6
Q

Proxy Revocation

A

Proxy agreements are freely rervocable by the shareholder even if the proxy states that it is irrevocable.

Unless proxy coupled with an interest or legal right

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7
Q

Proxy Coupled with Interest

A

Under RMBCA, a proxy coupled with an interest include:
1) a pledge (person who lends money and accepts a pledge for loan)
2) a person who purchased or agreed to purchase shares
3) creditor of corp that extended credit
4) employee of corpo whose employment contract requires appointment
5) a party to a voting agreement

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8
Q

Unqualified Right to Inspect

A

A shareholder has an unqualified right to inspect and copy:
1) Articles of Incorporation
2) Bylaws
3) Resolutions by the BOD re class of shares
4) Shareholder Meeting Minutes from past 3 years
5) written communications sent to shareholders
6) names/address of directors and officers
7) most recent annual report

5 day notice

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9
Q

Right to Inspect for Proper Purpose

A

A shareholder has the right to inspect and copy certain accounting records if:
1) the inspection is made during regular business hours/reasonable location
2) there is a 5-day written notice
3) demand made in good faith and for proper purpose
4) purpose is described with particularity
5) records are directly connected with purpose

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10
Q

Proper Purpose

A

A purpose reasonably relevant to the shareholder’s interest as a shareholder.
1) determining share value
2) determining whether corp engaged in illegal conduct
3) investigate wrongdoing/mismanagement
4) protect financial interest in corp

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11
Q

Good Faith for Inspection

A

Shareholder must present evidence to establish a credible basis to infer possible wrongdoing.

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12
Q

Fiduciary Duties of Shareholders

A

Generally do NOT owe fiduciary duties to fellow shareholders.

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13
Q

Close Corp Fiduciary Duties

A

Controlling shareholderrs in close-corp owe fiduciary duties of loyalty and good faith and fair dealing to minority shareholders.

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