Asked by Jenifer Lalnunkimi on Jun 29, 2024
Verified
The 2016 RMBCA provides a statutory ratification procedure for shares that may have been improperly issued. Upon the effectiveness of the ratification, the overissued shares are valid shares as of
A) the date originally issued.
B) the date of the ratification .
C) whatever time set forth in the bylaws has passed.
D) the date the overissue is discovered.
Statutory Ratification
The process by which a legislative body formally approves an action, treaty, or agreement previously enacted or signed.
Overissued Shares
Stock shares that have been erroneously or unlawfully issued beyond the number authorized by the company's charter.
- Acquire knowledge of significant legal matters regarding the compensation for stocks.
Verified Answer
CC
Chelsea CarterJul 01, 2024
Final Answer :
A
Explanation :
The 2016 Revised Model Business Corporation Act (RMBCA) states that upon the effectiveness of the ratification of improperly issued shares, those shares are considered valid as of the date they were originally issued. This provision ensures that the shares are treated as if they had been properly issued from the start, maintaining continuity and stability in the corporation's share structure.
Learning Objectives
- Acquire knowledge of significant legal matters regarding the compensation for stocks.