To Prevent a Majority Shareholder from Dominating the Management and Operation

question 42

Multiple Choice

To prevent a majority shareholder from dominating the management and operation of a close corporation, the firm should

• A)require more than a majority of directors approve any board action.
• B)restrict the transferability of shares to outside persons.
• C)reorganize into a sole proprietorship or partnership.
• D)hold special shareholders' or directors' meetings on an annual basis.

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Definitions:

Ethnographic Research

A data-collection method that sends trained observers to watch and interact with a subject population in their natural environment.

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs, and the impacts that these processes have on the consumer and society.

Reliability

The degree to which an assessment tool produces stable and consistent results over time.

Validity

The degree to which a tool, test, or study accurately measures what it intends to measure or reflects the true reality.