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:

Classical Economic

A school of thought in economics that emphasizes the role of free markets, limited government intervention, and the importance of economic decisions based on rational self-interest.

Morally Required

Actions or behaviors that are considered necessary according to ethical principles or moral obligations.

Social Responsibility Strategy

A business approach that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.

Organically Grown Cotton

Cotton cultivated without the use of synthetic pesticides, fertilizers, or genetically modified organisms, focusing on sustainability and environmental wellbeing.