The Revised Act Authorizes Shareholders in Closely Held Corporations to Adopt

question 20

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:

Structured

Organized in a clear, systematic way, often with a set format or pattern.

Authoritarian

A management approach where a single person makes all the decisions without much contribution from the team members.

Hierarchical

A system in which people or groups are ranked one above the other according to status or authority.

Initiative

the ability to assess and initiate things independently, often leading to new ideas or actions without being directed.