Explore the legal terms and concepts related to Rights of Shareholders. Click on any term below to learn more about its definition and applications.
In regards to shareholder suits, what are derivative action?
A shareholder may sue derivatively for a breach of duty on behalf of the corporation. A suit is deri...
What is pooled or block voting?
Shareholders who own relatively few voting shares may decide to increase their influence by agreeing...
How is an action approved at a shareholder meeting?
If a quorum is present, the action is approved if the votes cast in favor of the proposal exceed the...
What are the liabilities of shareholders and controlling shareholders?
Generally, shareholders are not liable for obligations of the corporation, except: (1) where one pie...
What is a professional corporation and how does it form?
Licensed professionals may incorporate as a professional corporation, which requires (1) the organiz...
What are the ways in which a corporation may restrict the transfer of shares?
A corporation may restrict the transfer of shares for any reasonable purpose (e.g., maintaining a fe...
When and how may shareholders eliminate corporate formalities?
In a closely held corporation, shareholders may eliminate corporate formalities so long as there is...
What are the traditional limitations on distributions?
Under traditional corporate laws, distributions could only be paid from accounts containing "surplus...
What is the priority of distribution for dividends?
Owners of common stock get paid last and equally. Owners of preferred stock get paid in full first....
What are the three most common forms of distributions?
The three most common forms of distributions are: (1) dividends paid to shareholders, (2) redemption...
When can or can't a board of directors declare a distribution?
Distributions are declared in the board of directors' discretion, unless the corporation is insolven...
What are the requirements for a shareholder to examine books and records?
Any shareholder has the right to examine the corporation's books and records with 5 days notice, so...
What is the difference between traditional voting and cumulative voting?
In traditional voting, there is a separate election for each director, so if another shareholder own...
What are the requirements for calling a special shareholder meeting?
The board of directors, president of the corporation or the holders of 10 percent of the voting shar...
What are the minimum meeting requirements for a corporation?
Every corporation must have an annual meeting, in which at least one director slot is up for electio...
What is the procedure for a shareholder to vote by proxy?
Voting by proxy requires (1) a writing (2) signed by the record shareholder, (3) sent to the secreta...
Who has the right to vote at a shareholder meeting?
Only the owner of the shares on the record date has the right to vote those shares.
What is the procedure for a shareholder to bring a derivative action?
To bring a derivative suit, the shareholder must (1) contemporaneously own stock (at least one share...
In regards to shareholder suits, what are direct actions?
A shareholder may sue directly for a breach of duty owed directly to the shareholder by an officer o...
In what form may dividends be paid?
Dividends can be paid to shareholders in the form of cash, property, or indebtedness while the corpo...
What is a redemption right?
Shares can be forcibly redeemed from shareholders where there is a redemption right (i.e., a built-i...
Are shareholder proxies revocable?
Proxies are revocable unless they are (1) labeled irrevocable, or (2) coupled with an interest (e.g....
