Marcel Lepine and Charles Aucoin Are the Two Equal Shareholders

question 67

Multiple Choice

Marcel Lepine and Charles Aucoin are the two equal shareholders of a corporation that runs a clothing business. They begin to fight to the extent that they won't speak to each other even to manage the business. Marcel brings a court application under the shareholder oppression remedy to get a court order that the corporation buy his shares. The corporation has the money to do so, but Charles won't agree to the purchase. Which of the following is TRUE?

• A)Marcel will not be successful on the court application because there has merely been a deadlock and no oppression.
• B)Deadlock between shareholders is sufficient grounds for an order under the shareholder oppression remedy.
• C)The court will only order a sale to strangers and not order the corporation to purchase Marcel's shares.
• D)This is a common situation and not serious enough to justify any of the oppression remedies.
• E)The court cannot order Charles to agree to the purchase.

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Definitions:

General Ledger

A comprehensive record of all financial transactions, organized by account, used to compile financial statements.

Control Accounts

General ledger accounts that summarize the details of transactions recorded in subsidiary ledgers.

Cash Purchase

A transaction where goods or services are bought and paid for with physical currency at the time of purchase.

Inventory

Inventory encompasses the raw materials, work-in-progress goods, and the finished products that a company holds with the intention of selling them to earn revenue.