Fact Pattern 39-1B Bertram,Claudia,and Dynah Form Eat Local,Inc. ,A Closely Held Corporation,and Agree

question 12

Multiple Choice

Fact Pattern 39-1B
Bertram,Claudia,and Dynah form Eat Local,Inc. ,a closely held corporation,and agree to restrict the transfer of its stock to anyone else.The agreement provides that if one of the shareholders dies,his or her shares of stock in Eat Local will be divided to maintain the proportionate control of the survivors.
-Refer to Fact Pattern 39-1B.A reasonable purpose for a stock transfer re?striction in a closely held corporation,like the agreement between Bertram,Claudia,and Dynah,is

• A)a desire to limit the participation of outsiders in the firm.
• B)a goal to restrain insiders from taking advantage of their position.
• C)an attempt to restrain the free flow of commerce among investors.
• D)a wish to restrict the transfer of the shareholders' physical assets.

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Definitions:

Terror

The use of extreme fear as a means of coercion, often involving violence and threats, to achieve certain ends such as political, religious, or ideological goals.

Directorate

refers to a form of government or a governing body, such as the five-member Directory that ruled France from 1795 to 1799 during the latter stages of the French Revolution.

Conservative Body

A group or organization that advocates for maintaining traditional values and resisting major changes in societal or political structures.