You Have Been Asked by Two Fellow Graduates to Join

question 110

Multiple Choice

You have been asked by two fellow graduates to join them in incorporating a closely held corporation that would commence a consulting business. One was in your class, so you know him quite well, but the other is graduating from a different school. You have been discussing the law to review the protection it gives you. Read each of the following statements separately and indicate which is false.

• A) As a shareholder, you will have the right to vote for the directors, who in turn will choose the officers.
• B) A shareholder's agreement would lessen any misunderstandings about rights and obligations.
• C) If you each take one-third of the first allotment of the shares, you will necessarily be a minority shareholder.
• D) If you have pre-emptive rights and the directors decide to issue a new allotment of shares, the corporation must offer you a portion of the new issue to allow you to keep your proportional share of the corporation.
• E) If you were voted out as a director by the others, who could show that it was in the best interests of the corporation, you could always sell your shares to any interested buyer without interference from the other directors.

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Definitions:

Prosocial Behavior

Actions intended to benefit others or society as a whole, such as helping, sharing, and cooperating.

Empathy

The capacity to understand or feel what another person is experiencing from within their frame of reference, essentially placing oneself in their position.

Empathy Gap

A cognitive bias where people underestimate the influence of feeling states (like pain or hunger) in themselves or others, leading to misunderstanding or lack of empathy.

Empathy-Altruism Model

A theory suggesting that feeling empathy for someone in need can prompt altruistic behavior, aiming to help solely for the benefit of the other person.