John and Two Friends Incorporated a Closely Held Corporation

question 69

Multiple Choice

John and two friends incorporated a closely held corporation.Each bought an equal number of common shares in the corporation.Each became a director,an officer,and an authorized agent of the corporation.Which of the following is true?

• A)Each of them,as a director,owes a fiduciary duty to the others,as shareholders.
• B)As director,each owes a fiduciary duty to the creditors of the corporation.
• C)The corporation is more highly regulated and less free of government regulations and control than a broadly held corporation would be.
• D)If the affairs of the corporation are being conducted in a manner that is unfairly prejudicial to any one shareholder,that shareholder could seek relief from such oppression from the court.
• E)Since the corporation is a legal fiction,all of its activities must be carried out through principals.

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Definitions:

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