Shareholders must begin the litigation process by asking the board of directors to bring suit,an action called
A)proxy access.
B)proper purpose.
C)making demand.
D)benchmarking.

Question

Quizplus · Accepted Answer

Making a demand refers to the process by which shareholders request the board of directors to initiate a lawsuit on behalf of the company. If the board fails to act upon the request, shareholders may then proceed to file a derivative lawsuit. Proxy access refers to the ability of shareholders to nominate candidates for the board of directors. Proper purpose refers to the requirement that shareholders must have a legitimate reason for requesting company records or taking action. Benchmarking refers to the process of comparing a company's performance with that of its peers.

Shareholders Must Begin the Litigation Process by Asking the Board