Asked by Maria Mendez on Jul 07, 2024
Verified
Han is a shareholder of Insulation Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Han files a suit on its behalf. Any damages recovered by the suit will go to the firm's
A) shareholders, excluding Han.
B) treasury.
C) directors.
D) shareholders, including Han.
Treasury
A government department responsible for managing the finances, revenue, and economic policy of a country.
- Acquire knowledge of the legal statutes that protect shareholder privileges, which include the ability to vote and engage in legal actions on the corporation's behalf.
- Comprehend the legal facets of corporate responsibility and accountability, including liabilities for wrongful behaviors and fiscal mismanagement.
Verified Answer
ML
Miguel LeitaoJul 10, 2024
Final Answer :
B
Explanation :
When a shareholder files a suit on behalf of the firm (a derivative suit), any damages recovered are typically awarded to the firm's treasury, not directly to shareholders or directors. This action benefits the firm as a whole, including all shareholders indirectly.
Learning Objectives
- Acquire knowledge of the legal statutes that protect shareholder privileges, which include the ability to vote and engage in legal actions on the corporation's behalf.
- Comprehend the legal facets of corporate responsibility and accountability, including liabilities for wrongful behaviors and fiscal mismanagement.