Alan, Bettina, and Carl propose to set up a corporation to carry on a consulting business. The
Question:
Alan, Bettina, and Carl propose to set up a corporation to carry on a consulting business. The corporation will only have only common shares-20 percent will be held by each of Alan and Bettina, and 60 percent by Carl, based on their respective financial contributions. Alan and Bettina will run the business, while Carl will be a passive investor with no involvement in its daily activities. Nevertheless, Carl wants a veto over certain decisions, including all expenditures over $10 000 and all decisions regarding the hiring and firing of employees. Alan and Bettina agree that Carl should have such a veto. How should the corporation be structured to implement this arrangement?
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Despite being the majority shareholder Carl is not entitled to a veto over management ...View the full answer
Managing the Law The Legal Aspects of Doing Business
ISBN: 978-0133847154
5th edition
Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer
