ABC Ltd.is a closely held corporation.Two of the shareholders serve as directors.As directors, they voted to issue themselves more shares to increase their voting control of the corporation.Which of the following provisions would aid the other shareholders?
A)Indoor-management rule
B)Pre-emptive right provisions
C)Derivative-action provisions
D)Relief-from-oppression provisions
E)Dissent procedure

Question

Quizplus · Accepted Answer

Pre-emptive right provisions would aid the other shareholders by allowing them the first opportunity to purchase additional shares before they are offered to others, thus preventing dilution of their voting power.

ABC LtdIs a Closely Held Corporation