Because a director of a closely held corporation breached his duties to the corporation, the corporation lost $15,000. Despite the urging of the shareholders, the board of directors refused to begin an action on behalf of the corporation. Which one of the following provisions would aid the shareholders?

Question

Quizplus · Accepted Answer

Derivative-action provisions allow shareholders to sue on behalf of the corporation when the board of directors fails to take action against wrongdoing that harms the corporation. This would directly address the issue of the director's breach of duties and the board's refusal to act.

Because a Director of a Closely Held Corporation Breached His