Which of the Following Situations Would Allow a Shareholder to Sue

question 41

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 directors took an action that unfairly prejudiced a shareholder.
• D) If the directors issued shares without offering any of the new issue to the present shareholders.
• E) If the shareholders refused to enter into a shareholder's agreement.

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Definitions:

Greater Inequality

Refers to an increase in the unequal distribution of resources, wealth, or opportunities within a society or between different societies.

Income Distribution

The way in which a nation’s total earnings are spread among its population, affecting economic inequality.

Total Income

The aggregate amount of money earned or received by an individual or entity from all sources before any deductions.

Equality-Efficiency Trade-Off

The compromise between ensuring an equitable distribution of resources and reaching the highest level of economic efficiency.