Asked by autumn hager on May 07, 2024
Verified
Marisa was the Secretary-Treasurer of HotShot Enterprises Inc., a tea and coffee importer. She contacted Wes, who carried on business as a wholesaler, to determine if Wes might be interested in the purchase of the corporation's coffee import business. Wes expressed an interest in the purchase, and Marisa advised Wes that she would arrange to have the sale of the coffee business approved by the shareholders, as required by the corporation's bylaws. Marisa eventually produced a shareholders' resolution authorizing the sale. Later, it was discovered that proper notice of the shareholders' meeting had not been given, and no quorum of shareholders was present at the meeting. Marisa and the other directors of the corporation may be liable to the shareholders if they acted improperly, and in violation of the corporation's bylaws, in the sale of the business.
Liability
The state of being legally responsible for something, especially in terms of debts or legal obligations.
Corporation's Bylaws
The official rules and regulations that govern the management and operations of a corporation, typically established by its board of directors.
- Gain insight into the statutory procedures and obligations necessary for facilitating corporate shareholder meetings and the adoption of resolutions.
- Acquire knowledge about the legal duties of directors and officers involved in corporate governance.
- Discuss the nature of corporate litigation based on directors’ actions and shareholder rights.
Verified Answer
PA
Paola AlvaradoMay 14, 2024
Final Answer :
True
Explanation :
Marisa and the other directors could be held liable for acting in violation of the corporation's bylaws and not following proper procedures for obtaining shareholder approval for the sale, which is a breach of their fiduciary duties to the shareholders.
Learning Objectives
- Gain insight into the statutory procedures and obligations necessary for facilitating corporate shareholder meetings and the adoption of resolutions.
- Acquire knowledge about the legal duties of directors and officers involved in corporate governance.
- Discuss the nature of corporate litigation based on directors’ actions and shareholder rights.
Related questions
Any Limits on the Duration of the Shareholder Agreement Must ...
A Quorum of Shares Must Be Present at the Shareholders ...
Courts Have Held That Even If a Director of a ...
To Participate in a Shareholders' Meeting, a Shareholder Must Present ...
Which of the Following Occurs at a Corporation's Organization Meeting ...