If a Corporation Was Wronged by Negligent and Fraudulent Acts

question 3

Multiple Choice

If a corporation was wronged by negligent and fraudulent acts committed by one of its directors and consequently suffered a $45 000 loss, and if the board of directors will not take any action on behalf of the corporation against the wrongdoer, which of the following is true?

• A)A representative (derivative) action allows a shareholder to commence an action on behalf of the corporation.
• B)If the company failed to commence an action through its authorized agents (e.g., its directors), no action could be taken, because a corporation is merely a legal concept and must act through its authorized agents.
• C)The shareholders could proceed under the "dissent" procedure and force the corporation to pay them a fair market value for their shares.
• D)The shareholders could sue the corporation for oppression.
• E)The shareholders could force the directors to start the action on the basis of their "pre-emptive right."

---

Definitions:

Breaking Routines

The process of changing habitual actions or patterns to encourage innovation or adaptability.

Resistance Change

Opposition or pushback by individuals or groups within an organization against changes that are perceived as harmful or unnecessary.

Coercion

The act of compelling someone to act in a certain way by force or threat.

Force Field Analysis

A decision-making technique that analyzes the forces for and against a change to identify if the change is viable.