Facts: Adams and Barker were two individual scientists engaged in research related to inventing a patentable pharmaceutical product. Once they had gained critical mass for the project, they convinced Barker's old college roommate, Cornelius, to invest $100,000 in exchange for an ownership share in a newly formed company called Pharma Corporation (Pharma). The parties agreed that Adams and Barker would continue product development until the company was ready to apply for a patent, then Cornelius would use his contacts to find a manufacturer to produce and market the patented drug. Pharma was structured as follows:

Name Stock Owned (%) Role

Adams 35 President, Director

Barker 35 Vice President, Secretary, Director

Cornelius 30 Shareholder

The parties hired counsel to incorporate Pharma, issue stock certificates, and draft bylaws. The corporate records were then turned over to Barker and she filed them in her desk drawer. No additional formalities were followed and the records were not maintained, nor were any directors' or shareholders' meetings held. In year two, Pharma's application for a patent was rejected. The rejection required Adams and Barker to hire an additional expert to help with research and would put the project behind by approximately 16 months. Adams hired Elliot, a well-known scientist, to help with the project. At this point though, Pharma's financial resources were drying up and, trying to keep the company afloat, Adams began to pay certain Pharma bills with his personal credit card and Baker would sometimes write out personal checks for lab equipment.

2. Which of the following statements is true with respect to Pharma?

a. Pharma would be eligible to receive tax treatment as an "S" corporation, but the consent must be unanimous among the shareholders.

b. Adams has the implied power to hire Elliot at his own discretion and without need for approval from the shareholders.

c. Only the board of directors my appoint or remove officers of the corporation.

d. Cornelius is a shareholder does not typically have the power to fire an employee such as Elliot.

e. All of the above.