Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
11 Cards in this Set
- Front
- Back
|
Statutes that broaden the legal objectives of corporations permitting or requiring directors to take in account the interests of other constituencies other that shareholders to act in the best interest of the corporation over the long term.
|
Corporate Constituency Statutes
|
|
|
Beyond the Powers - Any act not permitted by the corporation statutes or the corporation's articles of incorporation
|
Ultra Vires
|
|
|
A committee who has fewer members that the board can more efficiently handle management decisions and exercise board powers
|
Committees of the board
|
|
|
Shareholders may cast as many votes for each nominee to a board of directors as they have shares
|
Straight Voting
|
|
|
Either support management or sell the shares. Selling a stock rather than trying to change a company's policies
|
Wall Street Rule
|
|
|
(1) Managers must make an informed decision - They must take the steps necessary to become informed about the relevant facts by making a reasonable investigation before making a decision. (2) The managers may have no conflict of interest. The managers may not benefit personally - other than as shareholders - when they transact on behalf of the corporation. (3) The managers must have a rationale basis for believing that the decision is in the best interest of the corporation.
|
Business Judgment Rule
|
|
|
A transaction that a person in an "Arms Length" bargain would have bound the corporation to it.
|
Intrinsic Fairness Standard
|
|
|
When a group of shareholders have been isolated for beneficial treatment to the detriment of another isolated groups of shareholders
|
Oppression
|
|
|
Merging a corporation with another corporation creating a newly formed corporation under terms by which the minority shareholders do not receive shares of the new corporation but instead only receive cash or other securities.
|
Freeze Out
|
|
|
Under the MBCA, a director who loses a lawsuit may be indemnified by the corporation even though the corporation is not required to do so if the corporation feels the director acted in good faith and acted in the best interests of the corporation.
|
Permissible Indemnification
|
|
|
A director is entitled to this for reasonable litigation expenses when they are sued and win completely.
|
Mandatory Indemnification
|
