The Revised Act Permits the Board of Directors to Adopt

question 77

Multiple Choice

The Revised Act permits the board of directors to adopt certain amendments without shareholder action, unless the articles of incorporation provide otherwise. These amendments would include:

• A) extending the duration of a corporation if it was incorporated when limited duration was required by law.
• B) changing each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only one class of shares.
• C) making minor name changes.
• D) All of these.

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Definitions:

Transferability

The ability of an asset or property right to be sold or otherwise transferred from one party to another.

Watered Stock

Shares issued by a company at a value much greater than its asset worth, inflating its apparent value without actual backing.

Fair Market Value

An estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.

Business Judgment Rule

A legal principle protecting corporate directors and officers from liability for decisions made in good faith and in the best interest of the company.