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10 Cards in this Set

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  • Back
What are preemptive rights and when do they attach?
If a SH has them, he is entitled to maintain his relative rights by the use of preemptive rights. For corporations formed before 1998, the rule is that a SH who holds shares with either an unlimited dividend right or voting rights is entitled to them After 98, you need there to be it in the certificate of incorporations.
When do preemptive rights not attach?
Preemptive rights do not attach to shares authorized in the original certificate of incorporation and sold or optioned within two years of the filing of the certificate.

Preemptive rights do not attach to shares offered for consideration other than cash.
Is a restriction requiring unanimous consent before a sale reasonable?
No, , bc it allows the sale of shares to be restricted for any reason or no reason at all.
If I buy shares with restrictions on alienation which is not noted conspicuously on the shares themselves, am i bound?
NO, Restrictions imposed by the issuer arenot binding on a bona fide purchaser without actual knowledge, unless the restrictions are noted onthe shares.
Does a corporate president have standing to bring an action under the corporate opportunity doctrine?
An action may be brough against an officer or director to compel an accounting for violation of a duty. The action may be brought by the corporation itself, an officer or director of the corporation, or a shareholder.
Absent a provision to the contrary in the certificate of incorporation, the number of directors authorized can be amended by a ____vote of the shareholders, post 1998
What is the duty of care?
Directors and officers of a corporation must exercise the diligence, care, and skill that an ordinarily prudent person would exercise under similar circumstances in like position.
Can the certificate of incorporation limit the liability of directors to SH for breaches of duty?
Yes. But only as long as the breach is not found to be in
1. bad faith
2. intentional misconduct or knowing violation of the law
3. result in a financial profit or other advantage to which the director was not legally entitled.
4. violate statutory liabilities of directors.
Can a corporation repurchase stock from SH?
YEs, but its subject to certain limitations. The corporation may not be rendered insolvent by the repurchase, nor may the repurchase be effected for an improper purpose.
True or false, a merger must have a legitimate purpose?