Which Two of the Following Are Examples of Breaches of Fiduciary

question 104

Multiple Choice

Which two of the following are examples of breaches of fiduciary duty?

• A) The directors of the corporation, contrary to the request of the shareholders, refused to declare dividends.
• B) A director of a corporation, as director, learned of a good deal and took advantage of it for himself before the corporation had the opportunity to do so.
• C) A promoter of a corporation sold property to the corporation for three times what he paid for it after he made full disclosure of his interest to an independent board of directors, which voted for the purchase.
• D) A shareholder started a business that competed directly with the business.
• E) An employer charged his employees for parking after supplying it free for years.

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Definitions:

Furtherance

An action taken to advance or promote a particular cause, objective, or interest.

Liquidation

The process of closing a business, selling its assets, and using the proceeds to settle its debts, with any remaining funds distributed to owners or shareholders.

Distributions-in-Kind

Non-cash assets paid out to investors or partners from a firm or fund.

Partnership's Assets

Items of value owned by a partnership that are used or can be used to conduct its business.