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15 Cards in this Set
- Front
- Back
BOD - General Powers |
Ds are responsible for the management of the business and affairs of the corp. |
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BOD - Qualifications |
The Ds need not be SHs in the corp or resident of any particular state. |
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BOD - Removal of a Director |
Ds may be removed by the SHs for cause or without cause. |
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BOD - Meetings |
They basically are required to have meeting according to the bylaws. |
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BOD - Quorum |
A majority of the BODs constitutes a quorum for the meeting unless a higher or lower number is required by the article or bylaws, but a quorum can be no fewer than one-third of the board members. Unlike SHs, a D can break quorum by withdrawing from the meeting. |
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BOD - Approval of Action |
If a quorum is present, resolutions will be deemed approved by a majority of directors present. A D cannot bind the corp without actual authority. Actual authority generally can arise only if: (i) proper notice was given for the Ds meeting, a quorum was present, and a majority of the Ds approved the action, or (ii) there was unanimous written consent of the directors. |
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BOD - Delegation of Authority |
May create subcommittees to act on behalf of the BOD but the Ds remain responsible for the supervision of the committees. |
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BOD - Right to Inspect |
Ds have a right to inspect corporate books. |
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Directors Duties and Liabilities |
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BOD - Personal Liability of Ds May be Limited |
The article may limit liability. Article CANNOT limit or eliminate liability for (i) financial benefits received by the D to which she is not entitled, (ii) an intentionally inflicted harm on the corp or its SHs, (iii) unlawful corporate distributions, or (iv) an intentional violation of criminal law. |
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BOD - Duty of Care |
Ds have a duty to manage to the best of their ability. They must discharge their duties: (i) in good faith; (ii) with the care that an ordinarily prudent person in a like position would exercise under similar circumstances; and (iii) in a manner the Ds reasonably believe to be in the best interests of the corporation. |
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BOD - Duty to Disclose |
The Ds have a duty to disclose material corporate information to other members of the board. |
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BOD - Duty of Loyalty Interested Director Transactions |
If a D will benefit from a transactions her corporation is about to enter into, the D must disclose this information to the BOD (or to the SHs). Disinterested directors (or the SHs) must then approve the transaction. If there is no disclosure, the transaction can be set aside unless it is fair to the corporation. Alternatively, the corporation can recover damages equal to the director's profit. |
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BOD - Duty of Loyalty Corporate Opportunity Doctrine |
The D's fiduciary duties prohibit them from diverting a business opportunity from their corporation to themselves without first giving their corporation an opportunity to act. |
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BOD - Duty of Loyalty Competing Business |
Directors may engage in unrelated businesses, but engaging in a competing business probably creates a conflict of interest. |