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 pursue legal action on behalf of the corporation when the board of directors refuses to do so. In this scenario, the shareholders can use derivative-action provisions to recover the $15,000 lost due to the director's breach of duty.

Because a Director of a Closely-Held Corporation Breached His Duties