The Revised Act Authorizes Shareholders in Closely Held Corporations to Adopt

question 60

Multiple Choice

The Revised Act authorizes shareholders in closely held corporations to adopt shareholder agreements that depart from statutory norms by altering the governance of the corporation. These agreements:

• A) are effective if adopted by a majority of the shareholders.
• B) are valid for the life of the corporation unless a new agreement is reached.
• C) are binding on shareholders, the state, creditors, and other third parties.
• D) terminate automatically if the corporation's shares are traded publicly.

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Definitions:

Equilibrium Point

Point at which quantity demanded equals quantity supplied; where demand and supply curves cross.

Equilibrium Price

The cost at which the amount of a product supplied matches the amount of the product desired.

Equilibrium Quantity

The supply of goods or services meets the demand at the market's equilibrium price.

Equilibrium Price

The price point at which the quantity of goods supplied equals the quantity of goods demanded, leading to a stable market condition.