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."

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Definitions:

Observing And Listening

The act of paying attention and actively understanding information through sight and sound.

Turning Up Sensitivity

Enhancing one's responsiveness or receptivity to emotional, physical, or social stimuli.

Politicking Strategy

The use of strategic maneuvers or tactics within a political context to gain advantage or achieve specific objectives.

Upward Appeals

A tactic where employees seek the support or intervention of higher-ranking individuals within the organization to influence decisions.