If a Corporation Were Wronged by Negligent and Fraudulent Acts

question 52

Multiple Choice

If a corporation were wronged by negligent and fraudulent acts committed by one of its directors and consequently suffered a $45 000 loss,and if the board of directors will not take any action on behalf of the corporation against the wrongdoer,which of the following would be true?

• A)A representative (derivative)action allows a shareholder to commence an action on behalf of the corporation.
• B)If the company failed to commence an action through its authorized agents (e.g.,its directors),no action could be taken,because a corporation is merely a legal concept and must act through its authorized agents.
• C)The shareholders could proceed under the "dissent" procedure and force the corporation to pay them a fair market value for their shares.
• D)The shareholders could sue the corporation for oppression.
• E)The shareholders could force the directors to start the action on the basis of their "pre-emptive right."

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