You have been asked by two of your classmates to join them in incorporating a closely held company that would commence a consulting business. One was in your class so you know him quite well, but the other is graduating from a different school. You have been discussing company law to review the protection it gives you. Read each of the following statements separately and indicate which is false.
a. As a shareholder, you will have the right to vote for the directors, who, in turn, will choose the officers.
b. A shareholder's agreement would lessen any misunderstandings about rights and obligations.
c. If you each take one-third of the first allotment of the shares, you all will necessarily be a minority shareholder.
d. If the directors decide to issue a new allotment of shares, the company must offer you a portion of the new issue to allow you to keep your proportional share of the company.
e. If you were voted out as a director by the others who could show that it was in the best interest of the company, you could always sell your shares to any interested buyer.