A Corporation May Effectively Limit the Liability of Directors' Duty

question 8

Multiple Choice

A corporation may effectively limit the liability of directors' duty of due ________

• A) Using corporate funds to buy directors liability insurance
• B) Using the derivative action rule
• C) Specifying in the articles of incorporation that directors will not be liable for willful negligence.
• D) a and b
• E) b and c

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Definitions:

Government Failure

Misallocation of resources in the public sector.

U.S. Income Tax

A tax levied by the federal government of the United States on the annual income of individuals, corporations, trusts, and other legal entities.

Cradle-to-Grave Security

refers to a system of comprehensive social welfare policies designed to provide individuals with protection and support from childhood through old age.

Socialist

An advocate or supporter of socialism, a political and economic theory advocating for the ownership and control of the means of production by the community as a whole.