Which of the Following Is True Regarding Any Duties of Controlling

question 44

Multiple Choice

Which of the following is true regarding any duties of controlling shareholders in relation to control of a corporation?

• A) Controlling shareholders owe no duties other than to maximize their own wealth.
• B) Controlling shareholders generally have a duty to control the corporation in a fair, just, and equitable manner, known as the standard of entire fairness.
• C) Controlling shareholders may act to maximize their own wealth only so long as they do not intentionally harm and exhibit bad faith toward minority shareholders, a standard known as minority shareholder respect and fair dealing.
• D) Controlling shareholders must appoint minority shareholders to vote a certain percentage of their shares in instances in which the minority shareholders demand that right.

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Definitions:

Interim Periods

Shorter reporting periods within a fiscal year, such as quarters or months, used by companies to provide timely financial information.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid, respectively.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash transactions occur.

Income

The money received, especially on a regular basis, for work or through investments.