Mr. Ace of Oink Inc., a closely-held corporation, is one of three shareholders. After several years of considerable success, the corporation hit hard times. The other shareholders, Mr. Bane and Mr. Curr, in the best interests of the corporation, voted Mr. Ace out as a director and voted not to renew his employment contract. Upset by these events, Mr. Ace just wanted to sell his interest and leave the corporation. The other two shareholders, however, refused to buy his shares. Furthermore, when he attempted to sell his shares to his brother, who was interested in the corporation, they refused to register the brother as a member. Which of the following is true?
A) The court would "lift the corporate veil" because Mr. Bane and Mr. Curr were hiding behind the corporation to commit a fraud.
B) Because of statutory preemptive right provisions, if Ace wants out, the other shareholders must buy him out.
C) Mr. Ace could have avoided such a dilemma through provisions of a shareholders' agreement.
D) Mr. Ace could sue the corporation for breach of its fiduciary duty.
E) Mr. Ace could sell his shares to whomever he chose and the remaining shareholders must register the new owner.
Correct Answer:
Verified
Q25: Another term commonly used where a bond
Q26: In jurisdictions where the registration system of
Q27: Which of the following is an example
Q28: Mr. A is the sole shareholder of
Q29: In 2011, Rambolin incorporated Rambolin Industries Ltd.
Q31: Jed Wimsey, in auditing the books of
Q32: In which of the following relationships is
Q33: Art Raskle was an officer, director, and
Q34: Which two of the following are examples
Q35: Which of the following situations would allow
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents