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3 Cards in this Set
- Front
- Back
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How can an involuntary dissolution of a company be enacted?
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1. By board resolution or resolution of majority of shares entitled to vote, stating that
a) corp has insufficient assets to discharge its liabilities or b) dissolution would be beneficial to shareholders 2. One-half or more of shares entitled to vote may petition if a) directors too divided to manage or b) shareholders too divided to elect directors or c) magnitude of internal dissention makes dissolution beneficial to shareholders 3. any shareholder entitled to vote may petition if shareholders unable to elect directors for two annual meetings 4. 20% or more of voting shares in a corporation whose shares are not traded on a securities market may petition on either of these grounds: a. Mgmt’s illegal, oppressive, or fraudulent acts towards the shareholders b. Mgmt’s wasting, diverting, or looting assets |
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What is an "oppressive" act for the purposes of determining whether a shareholder may petition for dissolution?
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Oppressive = defeats the shareholder’s reasonable expectations for buying stock
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What is the effect of a subscriber default?
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1. If subscriber has paid < 50% of the purchase price and fails to pay the rest w/in 30 days of written demand → corp can keep the $ and cancel the shares. Stock becomes authorized and unissued
2. If subscriber has paid 50% of more and fails to pay the rest w/in 30 days of written demand a) → corporation must try to sell the stock to someone else for cash b) If nobody is willing to pay → corp may keep $ and cancel the shares → stock becomes authorized and unissued c) If someone will pay more than the remaining balance due → defaulting subscriber recovers any excess over what she agreed to pay (less corporation’s expenses in selling to new purchaser) |
