Deck 39: Corporations: Directors, Officers, and Shareholders

Question 1

The text case Patrick v. Allen discussed whether the business judgment rule exempted directors of a corporation from liability for renting land to a private golf course, of which several directors were members, at a price sufficient to cover only property taxes. Which of the following was the result?

A) That the directors could not benefit from the rule because the business judgment rule applies to officers, not directors.
B) That while the business judgment rule applies to directors, it did not apply to provide protection to the directors because they stood to benefit personally.
C) That the business judgment rule applied to shield the directors from liability because no fraud was involved in the transaction.
D) That the business judgment rule applied to shield the directors from liability because the directors received no money directly from the golf course.
E) That the business judgment rule applied to shield the directors from liability because the transaction was properly recorded on the company's books and not hidden.

Answer 1

B

Question 2

Which of the following is true regarding the Revised Model Business Corporation Act?

A) It has been adopted at least in part in over half of the states.
B) It has been fully rejected in over half of the states in favor of the Model Business Corporation Act.
C) It has been adopted fully by seventy-five percent of the states.
D) It has been rejected in over half of the states in favor of the Model Corporate Act.
E) There is no Revised Model Business Corporation Act.

Answer 2

A

Question 3

Daily management of a corporation is the direct responsibility of the shareholders.

Answer 3

False

Question 4

If a director makes a decision that inadvertently harms the company, shareholders can hold the director liable for the bad decision under all circumstances.

Question 5

A board of directors may take no action that benefits a director in his or her personal capacity.

Question 6

The French Penal Code adopts what is called the ________ which requires that corporate criminal liability be applied only in cases that pertain to an "express mention in the law or in a French regulation."

A) Strict liability rule
B) Res ipsa standard
C) Specialty principal
D) High priority rule
E) Protectionist principal

Question 7

Which of the following was the result on appeal in McCann v. McCann, the case in the text involving whether a corporation engaged in a "squeeze-out" as to a minority shareholder?

A) That the business judgment rule does not apply in such situations and that so long as there is any business reason for a transaction, a corporation cannot be found liable for a "squeeze-out" resulting in dismissal of the plaintiff's claims.
B) That while the business judgment rule applied, the corporation submitted sufficient evidence to establish legitimate reasons for all questioned transactions and that it, therefore, could not be held liable to the complaining minority shareholder.
C) That a material question of fact as to whether the directors could be found to have engaged in a "squeeze-out" of the beneficiary, causing him harm beyond every other shareholder, and that the case would be remanded for further proceedings.
D) That because he owned over 20% of the stock, the failure to grant the complaining minority shareholder a seat on the board in and of itself was sufficient under the facts presented to establish that the corporation was guilty of behavior constituting an illegal "squeeze-out."
E) That the failure to declare a dividend when sufficient assets existed with which to do so in and of itself was sufficient under the facts presented to establish that the corporation was guilty of behavior constituting an illegal "squeeze-out."

Question 8

There is no minimum number of directors who must be present at a directors meeting in order for decisions to be valid.

Question 9

In the Case Opener, a majority shareholder voted to award a bonus to her son, the president of the company, over the objection of minority shareholders. Which of the following was the result on appeal?

A) That in awarding the bonus, the majority shareholder violated the duty of loyalty she owed to the company.
B) That in awarding the bonus, the majority shareholder violated the duty of care she owed to the company.
C) That in awarding the bonus, the majority shareholder violated the business judgment rule.
D) That the majority shareholder was guilty of no violation in awarding the bonus.
E) That the majority shareholder's vote to award the bonus would be upheld only if she submitted additional proof that the bonus was deserved.

Question 10

The primary goal of shareholders is to raise the value of the company stock.

Question 11

Directors or officers who violate their duty of loyalty are self-dealing.

Question 12

The three main groups of individuals within a corporation are directors, bondholders and customers.

Question 13

In most states, a corporation's bylaws can negate preemptive rights.

Question 14

If a director has caused harm to the business by violating a fiduciary duty, a shareholder can file a direct suit against the director.

Question 15

Directors have the right of up to 3 votes a piece.

Question 16

The Revised Model Business Corporation Act forbids directors' meetings being held via telephone.

Question 17

Directors and officers have a fiduciary duty of care.

Question 18

A stock subscription agreement signed before incorporation may obligate a person to purchase shares in the corporation.

Question 19

If a shareholder receives watered stock, they cannot be held personally liable.

Question 20

Typically shareholders use a majority vote to elect directors.

Question 21

Which of the following is false regarding officers of a corporation?

A) Officers are executive managers.
B) Officers run the day-to-day business of the corporation.
C) In most cases an individual may serve as both a director and an officer.
D) The rules of agency do not apply to the work of officers.
E) Qualifications required of officers are set forth in the corporate articles and bylaws.

Question 22

Who actually owns a corporation?

A) Directors and officers
B) Officers and shareholders
C) Directors only
D) Officers only
E) Shareholders

Question 23

A director may be removed for which of the following reasons?

A) At the will of the president.
B) In the discretion of the shareholders upon majority vote.
C) In the discretion of the shareholders upon a two-thirds vote.
D) In the discretion of other directors upon a majority vote.
E) For cause.

Question 24

While ordinary decisions made by directors require a ________ vote, more important decisions sometimes require a ________ vote.

A) Majority; two-thirds
B) Majority; three-fourths
C) Two-thirds; three-fourths
D) One-third; majority
E) Majority; unanimous

Question 25

Which of the following are directors who are not officers or employees of the corporation?

A) Approved directors
B) Outside directors
C) Inside directors
D) Affiliated directors
E) Unaffiliated directors

Question 26

While a shareholder is not legally recognized as an owner of corporate property, shareholders have a(n) ________ in the company.

A) majority interest
B) minimal interest
C) absolute interest
D) actual interest
E) ownership interest

Question 27

Which of the following is NOT within the primary role of directors?

A) Appointing, supervising and removing corporate officers
B) Declaring pay and corporate dividends for shareholders
C) Making financial decisions
D) Authorizing corporate policy decisions
E) Elect and remove other directors

Question 28

If a corporation has fewer than ________ shareholders, the Revised Model Business Corporation Act allows companies to eliminate the board of directors entirely.

A) 100
B) 50
C) 30
D) 25
E) 10

Question 29

If the corporate bylaws require a minimum of five directors to be present at each directors meeting, what happens if only two directors attend and they make a decision?

A) The decision is invalid because a quorum was lacking.
B) The decision is invalid because the directors did not have authority to vote
C) The decision is invalid unless shareholders vote to ratify
D) The decision is invalid because of a violation of the business judgment rule
E) The decision is valid

Question 30

Who can call a special shareholder meeting?

A) Only the board of directors
B) Only shareholders who own at least 10 percent of the corporation's outstanding shares
C) The board of directors, shareholders who own at least 10 percent of the corporation's shares, and those authorized in the articles of incorporation
D) Only those authorized in the articles of incorporation
E) No one. Meetings are held annually

Question 31

Pagean is a director that is also an officer of Plenary Enterprise Corporation. Pagean's role can also be considered a(n) ________ director.

A) approved
B) outside
C) inside
D) affiliated
E) unaffiliated

Question 32

How are directors typically chosen after the incorporation process?

A) By majority vote of the shareholders.
B) By majority vote of all officers.
C) By a two-thirds vote of shareholders.
D) The president appoints them in his or her discretion.
E) By a unanimous vote of the shareholders.

Question 33

Though it varies from state to state, how long do most states allow a director to serve?

A) One year
B) Two years
C) Three years
D) Five years
E) Seven years

Question 34

How is the number of corporate directors determined?

A) In the discretion of the president of the corporation.
B) By vote of the stockholders.
C) According to the corporate articles or bylaws.
D) According to the number of shares issued.
E) According to the amount of profit projected by incorporators for the first year.

Question 35

________ have business contacts with the corporation.

A) Association directors
B) Anticipated directors
C) Outlier directors
D) Affiliated directors
E) Unaffiliated directors

Question 36

Jose has an ownership interest in TY Corporation, but he is not involved in day-to-day operations. Jose can best be described as a(n)________?

A) Director.
B) Affiliated director.
C) Outside director.
D) Officer.
E) Shareholder.

Question 37

The requirement that a minimum number of directors be present at a meeting for decisions made at the meeting to be valid is which of the following?

A) A Quorum
B) Substantial group
C) Adequate group
D) Adequate assembly
E) Substantial assembly

Question 38

Which statement accurately describes how directors are chosen during incorporation?

A) Prior to incorporation, either the incorporators appoint them or the corporate articles name them.
B) Prior to incorporation, either the incorporators appoint them or by a majority vote of the shareholders.
C) Prior to incorporation, directors may only be named through the incorporators appointing them.
D) Prior to incorporation, directors may only be named by the corporate articles naming them.
E) Prior to incorporation, directors may only be named by the president appointing them.

Question 39

Beloxion is an outside director who has business contacts with the Carmenita Corporation. Beloxion would be considered a(n) ________.

A) associated director.
B) accompanying director.
C) intermediary director.
D) affiliated director.
E) unaffiliated directors.

Question 40

Jamira was hired by the board of directors to run the day-to-day business of a corporation. She is an agent of the corporation. Jarmia's role can best be described as a(n)________?

A) Director.
B) Affiliated director.
C) Outside director.
D) Officer.
E) Shareholder.

Question 41

Prior to an annual meeting, which of the following items, containing proposals made by shareholders, are sent to shareholders?

A) Meeting agenda
B) Proxy materials
C) Presidential materials
D) Officer materials
E) Meeting proposals

Question 42

Penelope is a shareholder in SMPB Corporation and is unable to attend the annual corporate board meeting. She authorizes Johnathan to be her ________ to vote on her behalf.

A) shareholder in wait
B) signatory
C) proxy
D) substitute
E) shareholder replacement

Question 43

Which of the following is false regarding the liability of directors and officers for criminal behavior in the U.S.?

A) Directors and officers can be held personally responsible for their own crimes.
B) Directors and officers can be held personally responsible for the crimes of other employees within the organization when they have failed to adequately supervise the employee's behavior.
C) According to the responsible person doctrine, an officer can be held criminally liable for conduct of an employee if the court determines that a responsible person would have known about and could have prevented the illegal activity.
D) Directors and officers who use insider information to trade the corporation's stock for a profit can be held liable for breaching their fiduciary duty.
E) A court may not find a corporate officer criminally liable for conduct of an employee unless the officer profited personally from the illegal activity.

Question 44

Which of the following, if any, is an authorization of a shareholder to allow someone else to vote in his or her place?

A) Approval
B) Acknowledgement
C) Proxy
D) Permissive voucher
E) There is no such document because a shareholder may not allow someone else to vote in the shareholder's place.

Question 45

What does the business judgement rule encourage?

A) It allows officers to self-deal if there is no real conflict with the corporation.
B) Directors and officers from ever being held accountable for bad decisions.
C) Individuals to seek out other corporations to partner with in the best interests of the corporation.
D) Shareholders to be involved in the day-to-day operation of the corporation.
E) It encourages individuals to serve as directors.

Question 46

For purposes of shareholders meetings, what is considered a majority vote?

A) The vote of at least 10 percent of shareholders total.
B) The vote of ½ of all outstanding shareholders.
C) The vote of 2/3 of all outstanding shareholders.
D) The vote of 90 percent of shareholders who make up a quorum.
E) The majority of the shares represented at a shareholder meeting where there is a quorum.

Question 47

________ shares are those that have a fixed face value noted on the stock certificate.

A) No par-value
B) Par-value
C) Watered
D) Valued
E) No-valued

Question 48

A director of a corporation knowingly releases a dangerous drug that will kill 10 percent of those who take the medication. He was concerned when the drug was being developed so he told the head of medical testing not to let him know if the drug had any adverse side effects. Since he was not told of the side effects, he felt he could not be required to report them to the FDA. Which of the following is true of his liability?

A) He cannot be held responsible because the corporation released the drug.
B) He cannot be held responsible because he was unaware of the dangers of the drug.
C) He can be held responsible for his own torts and crimes and for the crimes of other employees whom they have failed to adequately supervise.
D) He cannot be held responsible if the board of directors approved the release of the drug.
E) He cannot be held responsible because the illegal actions of hiding the drug's side effects were done by a subordinate.

Question 49

Which of the following is true of a shareholder's legal duties.

A) All shareholders have a fiduciary duty not to compete with the company
B) No shareholders ever have any legal duties
C) Shareholders typically have few legal duties, but majority shareholders can sometimes have fiduciary duties to the corporation and to minority shareholders
D) Shareholders typically have few legal duties, but minority shareholders can sometimes have fiduciary duties to the corporation and to majority shareholders
E) Shareholders have a fiduciary duty to each other, but not to the corporation.

Question 50

Unless otherwise designated as irrevocable, proxies last for ________ and can be withdrawn at any time.

A) 6 months
B) 11 months
C) One year
D) Two years
E) Three years

Question 51

In a closely held corporation, a breach of the duty of a majority shareholder to act with care and loyalty when selling his or her shares is known as ________.

A) Oppressive conduct
B) Majority holder misconduct
C) Minority oppression
D) Minority discrimination
E) Disloyal procedure

Question 52

The ________ has established that any shareholder who owns more than $1,000 worth of stock in a corporation can submit proposals to be included in proxy materials that are sent to other shareholders before an annual meeting.

A) Corporation Commission
B) Federal Trade Commission
C) Securities and Exchange Commission
D) Internal Revenue Service
E) Federal Regulatory Commission

Question 53

A director uses inside information to trade the corporation's stock for personal profit. Which of the following is true of the director's liability?

A) He cannot be held responsible because the corporation provides immunity.
B) He cannot be held responsible unless his trades hurt the company's value.
C) He cannot be held responsible unless the board of directors prohibited his trades.
D) He can be held responsible for violating the business judgment rule.
E) He can be held responsible for breaching his fiduciary duty to the shareholders from whom the stock was purchased.

Question 54

Which state in the U.S. has more than half of the publicly traded corporations?

A) Florida
B) Texas
C) Connecticut
D) Delaware
E) New York

Question 55

For no-par shares, Ryan a shareholder, must pay ________.

A) depreciated values.
B) the 12 month average of the stock.
C) premium prices.
D) value that is assessed by the officers.
E) fair market value.

Question 56

Nellie, an individual shareholder enters into a ________ which allows her to transfer share titles to a trustee in exchange for a voting trust certificate.

A) voting trust
B) proxy agreement
C) voting agreement
D) strategy agreement
E) trust sponsorship

Question 57

Ursula is an executive at a corporation. She becomes angry at her co-owners and begins making bad investments, buying up companies she thinks will soon go bankrupt. When she is sued for a breach of fiduciary duty, can the business judgment rule protect her?

A) Yes, because she was acting within the scope of her authority.
B) Yes, because the business judgment rule protects directors and officers from being held accountable for bad decisions.
C) No, because the business judgment rule is an exception to the fiduciary duty of board members.
D) No, because the business judgment rule does not apply to executives.
E) No, because she did not act in good faith.

Question 58

Shareholder meetings require a(n) ________, generally the presence of the shareholders holding more than 50 percent of the outstanding shares.

A) proxy
B) quantity
C) majority
D) quorum
E) ante

Question 59

In regard to cumulative voting, it is not guaranteed by RMBCA, but occurs only if the corporation's ________ provides for it.

A) voting proxy
B) articles of incorporation
C) bylaws
D) shareholder's voting memorandum
E) board of directors

Question 60

A director of a corporation knowingly releases a dangerous drug with the knowledge that 10 percent of those who take the drug will die. He illegally falsifies testing data to get the drug approved. Which of the following is true of his liability?

A) He can be held personally responsible for his crimes.
B) He cannot be held responsible for his actions because the corporation released the drug.
C) He can be held personally responsible only if the company was not a C-corporation.
D) He cannot be held responsible if the board of directors approved the release of the drug.
E) He cannot be held responsible unless he was at least the executive vice president.

Question 61

SMPB Corporation can issue ________ to shareholders to show proof of ownership in the corporation.

A) ownership documents
B) stock certificates
C) acknowledgment documents
D) ownership certificates
E) owner's documents

Question 62

Hans receives a dividend from his closely held corporation, causing the company to go insolvent. He was aware of the fact that the dividend would result in insolvency. Which of the following is true?

A) He is not liable, because shareholders are protected from liability
B) He is liable for losses to the extent of his investment.
C) He is personally liable and must return the funds to the corporation
D) He is liable only if he was a director
E) He is liable because he violated the business judgment rule.

Question 63

Which of the following may be redeemed for a certain number of shares at a specified price within a given time period?

A) Preemptive shares
B) Share allowances
C) Allocated shares
D) Stock warrants
E) Share grants

Question 64

Which of the following is false regarding corporate decisions that might personally benefit a particular director or officer?

A) There must be full disclosure of the interest by a director who might personally benefit from a corporate decision.
B) There must be full disclosure of the interest by an officer who might personally benefit from a corporate decision.
C) The director to benefit may vote on the issue although a majority of all directors must approve the transaction.
D) The duty to disclose an interest that might personally benefit a director is a fiduciary duty.
E) The duty to disclose an interest that might personally benefit an officer is a fiduciary duty.

Question 65

Under the common law, shareholders have ________ which give preference to shareholders to purchase shares of new issues of stock.

A) first rights
B) superior rights
C) preemptive rights
D) initial rights
E) shareholder's rights

Question 66

One method that restricts stock's transferability is known as the ________.

A) right of first refusal
B) initial refusal requirement
C) first rights of shareholders.
D) purchase rights of shareholders.
E) second chance purchase.

Question 67

If stock is issued below its fair market value this is known as ________.

A) underwater stock
B) loser stock
C) watered stock
D) undervalued stock
E) unsupported stock

Question 68

In the text case Auerbach v. Bennett a shareholder brought a derivative action after an internal audit of the GTE Corporation suggested that the corporation's management had paid significant amounts in bribes and kickbacks over a period of several years. Which of the following was the result on appeal?

A) The court ruled that the business judgment rule exempted the directors from liability.
B) The court ruled that the business judgment rule exempted the directors from liability only so long as the directors could establish that the shareholders did not lose money on account of their actions.
C) The court ruled that the business judgment rule exempted the directors from liability unless the shareholder could establish that the shareholders lost money on account of their actions.
D) The court ruled that the business judgment rule did not apply because illegality was involved and that the corporation was, therefore, liable.
E) The court ruled that the business judgment rule shielded the lawsuit insofar as foreign wrongdoing was alleged, but not for wrongdoing committed in the U.S.

Question 69

When the corporation will not issue physical stock certificates, shares are ________.

A) Approved
B) Unapproved
C) Unacknowledged
D) Acknowledged
E) Uncertificated

Question 70

[Self-Centered President] Allison is president of "We Manage You," a corporation set up to manage physician practices. Allison has never been very concerned with minority shareholders because she believes that they have little influence over the company since they cannot even elect a director. She is told, however, that her state just instituted the practice of cumulative voting. An election is coming up in which 10 directors will be elected. Minority shareholders own 2,000 shares, while majority shareholders own 8,000 shares. Allison tells her vice president, Marco, that she wants to ignore minority shareholders and focus her interests on majority shareholders and the directors. She also tells Marco that she wants to be particularly conscientious toward directors because the directors appoint officers, and she does not believe that she owes any actual duties to shareholders. She further orders Marco to destroy some documents subpoenaed in a criminal investigation against the company for illegal dumping. When Marco protests, Allison tells him not to worry because officers cannot be held responsible for criminal actions so long as the actions are done as part of the duties of an officer. She explains to him that only the corporation can be charged with liability in such cases.
How many votes will the minority shareholders have in the election?

A) 2,000
B) 4,000
C) 6,000
D) 10,000
E) 20,000

Question 71

A(n) ________ can be brought on behalf of individual shareholders if corporate directors fail to sue when the corporation has been harmed either by an individual, another corporation, or a director.

A) action in harm suit
B) shareholder action suit
C) shareholder's direct suit
D) shareholder's derivative suit
E) active allocation suit

Question 72

[Self-Centered President] Allison is president of "We Manage You," a corporation set up to manage physician practices. Allison has never been very concerned with minority shareholders because she believes that they have little influence over the company since they cannot even elect a director. She is told, however, that her state just instituted the practice of cumulative voting. An election is coming up in which 10 directors will be elected. Minority shareholders own 2,000 shares, while majority shareholders own 8,000 shares. Allison tells her vice president, Marco, that she wants to ignore minority shareholders and focus her interests on majority shareholders and the directors. She also tells Marco that she wants to be particularly conscientious toward directors because the directors appoint officers, and she does not believe that she owes any actual duties to shareholders. She further orders Marco to destroy some documents subpoenaed in a criminal investigation against the company for illegal dumping. When Marco protests, Allison tells him not to worry because officers cannot be held responsible for criminal actions so long as the actions are done as part of the duties of an officer. She explains to him that only the corporation can be charged with liability in such cases.
Is Allison correct that officers cannot be held criminally responsible for actions they take on behalf of a corporation?

A) Yes, she is correct.
B) She is correct only so long as the corporation is solvent.
C) She is correct only if the board of directors has accepted all liability for acts of officers.
D) She is correct only if environmental or employment matters are involved.
E) She is incorrect.

Question 73

[Self-Centered President] Allison is president of "We Manage You," a corporation set up to manage physician practices. Allison has never been very concerned with minority shareholders because she believes that they have little influence over the company since they cannot even elect a director. She is told, however, that her state just instituted the practice of cumulative voting. An election is coming up in which 10 directors will be elected. Minority shareholders own 2,000 shares, while majority shareholders own 8,000 shares. Allison tells her vice president, Marco, that she wants to ignore minority shareholders and focus her interests on majority shareholders and the directors. She also tells Marco that she wants to be particularly conscientious toward directors because the directors appoint officers, and she does not believe that she owes any actual duties to shareholders. She further orders Marco to destroy some documents subpoenaed in a criminal investigation against the company for illegal dumping. When Marco protests, Allison tells him not to worry because officers cannot be held responsible for criminal actions so long as the actions are done as part of the duties of an officer. She explains to him that only the corporation can be charged with liability in such cases.
Is Allison correct that she owes no duties to shareholders?

A) Yes, she is correct because it is the directors who owe duties to shareholders.
B) No, she is incorrect because she owes a duty of care to shareholders although she owes no other duties.
C) No, she is incorrect because she owes a duty of loyalty to shareholders although she owes no other duties.
D) No, she is incorrect because she owes both a duty of care and a duty of loyalty to shareholders.
E) She is partially correct. She owes both a duty of care and a duty of loyalty to minority shareholders, but no duties to majority shareholders because the law assumes that they have the power to protect their own interests.

Question 74

Dividends are considered ________ if they are paid when the corporation is insolvent.

A) illegal
B) invalid
C) irresponsible
D) debts
E) credits

Question 75

Michelyn is a director in Zemp Corporation. She has been quietly taking product home and selling it on the black market. The other directors of Zemp Corporation know about Michelyn's actions but fail to take corrective action. Zellen, a shareholder finds out and comes to you asking you what to do. What do you tell Zellen?

A) That Zellen has no recourse because the other officers must bring the suit against Michelyn.
B) Zellen should initiate a shareholder's derivative suit.
C) Zellen should initiate a shareholder's direct suit.
D) Zellen should seek help from the Secretary of State.
E) Zellen should bring a personal suit against Michelyn alleged wrong doing.

Question 76

[Kite Sales] Tatiana is president of a business that manufactures kites. The kites of her company, ABC Kites, are sold to large toy stores. After Tatiana learned a great deal about kites at ABC, she started to make kites at home. She started selling kites to friends. She also started to make inquiries regarding selling her kites to larger toy stores in the area, and she began making a few sales to them. Her plan was to start small and then leave ABC after she had increased sales. She did not work on her side project while she was on the clock with ABC. Some of the directors learned about her kite sales and accused her of wrongdoing. Tatiana denied any wrongdoing and pointed out that she did not work on her project while she was on the job with ABC.
What duty, if any, did Tatiana violate?

A) She did not commit any violation.
B) She violated the duty of loyalty.
C) She violated the duty of care.
D) She violated the duty of understanding.
E) She violated the duty of profit maximization.

Question 77

While incorporating, the future owners of the corporation want to restrict stock transferability to ensure that existing shareholders have the right to buy any shares of stock offered for sale by a shareholder within a specified time period. The right they should establish in their corporate bylaws is referred to as the ________

A) Right of adequate refusal
B) Right of first refusal
C) Right of first purchase
D) Right of first acknowledgement
E) Superior right of purchase

Question 78

Which of the following is NOT true of shareholder liability?

A) Shareholders are liable for the debts of a corporation to the extent of their investment
B) Shareholders are liable for a breach of contract if a stock subscription agreement was signed and no stock was purchased
C) Shareholders are liable for watered stock
D) Shareholders are liable for violations of the business judgment rule
E) Shareholders are personally liable for receiving illegal dividends.

Question 79

Marlin is a shareholder in a major corporation. He hears about some underhand dealings and has brought suit against the corporation. What type of suit is this known as?

A) Shareholder class action suit
B) Investor action suit
C) Shareholder's direct suit
D) Shareholder derivative suit
E) Shareholder investment suit

Question 80

Which of the following rights does not apply to corporate directors?

A) The right of compensation
B) The right of participation
C) The right of inspection
D) The right of indemnification
E) The right of obedience