shareholders rights

Question 0

what are the requirements for a shareholder or shareholders to be able to inspect the books and records of the company?

Answer 0

a shareholder (or group) that has been holder of record of at least 5% of all outstanding shares of any class of stock for at least six months, and who are not competitors of corporation may exercise the right. They must file a written request with corporate secretary. They must have a proper purpose. If a business competitor, then the percentage is 25%.

Question 1

what business records is a corporation required to amaintain at its offices for shareholders to be able to inspect/ review?

Answer 1

books and accounts showing amounts of assets, liabilities, receipts and disbursements, gains and losses; and records of proceedings of shareholders, directors, committees of board.

Question 2

what are the rights of share holders?

Answer 2

Right to Inspect Books
Dissenters Rights
Pre-emptive rights

Question 3

What are dissenters rights?

Answer 3

if vote to sale, lease, exchange ALL assets is approved by less than 80%, or if party to a merger (less than 80%), then any shareholder who voted against and filed objection prior to or at the meeting has dissenters rights, giving him right to demand corporation purchase his stock at fair market value

Question 4

what are preemptive rights?

Answer 4

right to purchase same percent of newly issued stock as they currently hold. must be in the articles.

Question 5

how often must a corporation have shareholder meetings?

Answer 5

annually

Question 6

what happens at an annual shareholder meeting?

Answer 6

directors elected, other business conducted. Any single shareholder can call regular meetings at the registered office if the corporation hasn’t held one for 18 months. (It doesn’t have to hold a meeting of no director is up to be elected)

Question 7

how much time must pass without an annual shareholders meeting before the shareholders can call for a meeting, and which shareholders can call for one?

Answer 7

18 months, and any shareholder can call for one at the registered office of the corporation

Question 8

may more meetings be called than the annual meeting/

Answer 8

yes, special meetings may be called. Notice must be given, no teleconference meetings are allowed

Question 9

Do shareholders have to have a meeting to make an action

Answer 9

no, shareholders may agree in writing to an action without having a meeting

Question 10

can one shareholder object to another calling a meeting

Answer 10

no, a single shareholder may call an annual meeting at the registered office if the corporation has not held an annual meeting for 18 months. If that has been met, there is no right to object.

Question 11

Is voting by proxy allowed for shareholders?

Answer 11

yes

Question 12

How many must be at shareholder meeting for business to be transacted?

Answer 12

a majority of TOTAL VOTING POWER, represented by person or proxy. May never be less than 1/4 of voting power if this is amended in by laws or articles

Question 13

WHen is a majority shareholder vote needed?

Answer 13

For all actions EXCEPT:
need 2/3 if amending articles, mergers, sale of assets
if diminishing the rights of a particular class, 2/3 of that class
for directorship, may be cumulative or straight voting
Note that dissolution is a majority of THOSE PRESENT

Question 14

Ordinarily, can a shareholder of a corporation withdraw from corporation and require them to purchase his or her stock

Answer 14

the concept of withdrawal is not normally associated with ownership in a corporation since the owners of the corporation are the shareholders, who are not thought of as members to belong to or can withdraw from the corporation. Unless there is some restriction in articles, by laws; a shareholder may sell or give away her shares of stock at any time she can find a buyer/ taker. There is no requirement that a corporation purchase the shares of a shareholder wanting to divest themselves of their shares. an exception arises when the shareholder has dissenters rights. If the corporation has, by a vote of tless than 80% approved a sale, lease, or exchange of all its assets or has become a party to a merger, any shareholder who voted against the action and filed an objection to it has dissenters rights. They can withdraw and demand that the corporation purchase his stock from him at fair market value.

Question 15

may a shareholder vote by proxy? what is proxy?

Answer 15

yes a written proxy to vote his shares given to another person and filing it with the corporate secretary is fine. a proxy is a document in which a shareholder transfers the power to vote the shareholders stock at a meeting to someone other than himself.

Question 16

may the shareholders take action by written agreement signed by less than all the shareholders?

Answer 16

shareholders cannot act simply by signing a written consent/ resolution by majority. they must act at a properly called shareholders meeting absent unanimous written consent.

Question 17

what is a shareholder derivative action?

Answer 17

a lawsuit in equity, brought by one or more shareholders of the corporation on behalf of the corporation, against any party against whom the corporation has a legitimate cause of action. (current or former shareholders, officers, directors) by asserting that the corporation itself is unwilling to bring the suit. If they are successful in recovery, the damages go into the corporate treasure, not the plaintiffs. Corporation must be joined as an indispensible party.

Question 18

what is a voting trust?

Answer 18

created by one or more shareholders of a corporation into which shares of stock in the corporation are donated. The ownership of the shares are transferred to a trustee who exercises all the rights of a shareholder. WHen dividends are distributed, the trustee rec’s them and then distributes them to the one or more veneficial owenrs of the trust shares in accordance with the trust document. thus, the legal and veneficial ownership of the shares are separated. A voting trust is valid 15 years from date of creation, or for any period named not exceeding 15 years.

Question 19

could shareholders be expelled, what are the grounds, who votes, what percentage is needed?

Answer 19

no. the concept of expulsion is not relevant in the context of corporate shareholders. There is no provision in the corporation laws that grants a corporation the right to force a shareholder to sell back his shares unless that right of redemption is specifially noted in articles and on shares.

Question 20

what is required to bind future shareholders to the legal effects of a shareholders agreement executed prior to the future shareholders purchase of shares in a corporation

Answer 20

shareholder agreements are binding on those who become shareholders after the agreement is entered into only if the terms of the agreement are set forth or summarized, or referenced and information as to where the terms may be inspected is set forth, in the certificates representing shares

Question 21

how many shareholders must attend a shareholder meeting for it to be properly called, and how many must vote in favor of a purchase offer?

Answer 21

in order for meeting to be valid for actions, a quorum of at least a majority of the total voting power must be present. Once meeting is properly convened with a quorum, in order for a sale of all or substanially all of corporations assets to be approved there must be an affirmative vote of 2/3 of voting power present.

Question 22

is a shareholder required to vote at a meeting

Answer 22

no, there is no obligation to vote or abstain from voting