Which of the Following Situations Would Allow a Shareholder to Sue

question 116

Multiple Choice

Which of the following situations would allow a shareholder 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 as director, voted to end the employment contract of the fifth, and voted not to buy his shares.
• B) If the corporation had been wronged (lost $30,000) by the negligent and fraudulent acts of one of its directors, but the corporation refused to make any action against the wrongdoer.
• C) If the shareholders refused to enter into a shareholder's agreement.
• D) If the directors took an action that unfairly prejudiced a shareholder.
• E) If the directors issued shares without offering any of the new issue to the present shareholders.

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Definitions:

Amino Acids

Natural compounds which come together to create proteins, functioning as essential components of living organisms.

Active Transport

The process in which molecules travel through a cell membrane from an area of lesser concentration to an area of greater concentration, necessitating the use of energy.

Small Intestine

The small intestine is part of the digestive system, responsible for absorbing nutrients from food through its lining into the bloodstream.

Cholesterol

A waxy, fat-like substance found in the cells of all animals, essential for the formation of cell membranes, certain hormones, and vitamin D.