When a majority of the directors of a corporation are not independent and the shareholders bring a derivative action against the directors,the burden of proving that the Zapata test has been met lies on the:
A)company secretary.
B)secretary of state.
C)corporation.
D)shareholders.

Question

Quizplus · Accepted Answer

When a majority of directors are not independent,the corporation has the burden of proving that the Zapata test has been met: good faith and reasonable investigation by the directors making the decision to dismiss the action and a determination by those directors that the best interests of the corporation are served by dismissal.

When a Majority of the Directors of a Corporation Are