Which of the Following Situations Would Allow a Shareholder of a Closely

question 81

Multiple Choice

Which of the following situations would allow a shareholder of a closely held corporation, with permission of the court, to sue on behalf of the corporation?

• A) If four of the five directors, in the best interests of the corporation, voted against the fifth director, voted to end the employment contract of the fifth director, and voted not to buy his shares.
• B) If the corporation had been wronged by the negligent and fraudulent acts of one of its directors, but the corporation refused to take any action against the wrongdoer.
• C) If the shareholders refused to enter into a shareholder's agreement.
• D) If the directors refused to declare a dividend.
• E) If the directors solicited proxies from all of the shareholders.

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Definitions:

Prominent Spokesman

A leading or notable figure who represents and speaks on behalf of a particular cause, organization, or group.

Milton Friedman

An American economist and Nobel Prize winner known for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.

Economic Thought

A branch of economics that studies the evolution of economic ideas and theories over time.

Keynesians

An economic theory that advocates for active government intervention in the marketplace and monetary policy to manage demand and smooth out cycles of boom and bust.