updated with the COrrect questions, from the correct chapter. - along with the chapter overview.
please answer questions 1a, 1b, 1c, 1d.
CHAPTER OVERVIEW A corporation is owned by its shareholders. Although they own the corporation, however, shareholders play little, if any, role in the day-today operation of a large corporation. Shareholders' activities are generally limited to electing and removing directors and to taking part in extraordinary corporate actions, such as amendment of the articles of incorporation and other fundamental changes to the corporate structure, including approval of mergers and dissolutions. These limited activities take the form of voting at shareholders' meetings. Additionally, shareholders have limited liability. Although their stock might decline in value, they are not liable for debts and obligations of the corporation. One exception to this rule of limited liability exists when shareholders do not respect the corporate entity and commingle its funds with theirs or fail to follow corporate formalities, such as failing to hold elections, meetings, and so forth. In such cases, it is said that the veil of limited liability will be "pierced to prevent fraud and injustice by holding shareholders liable for corporate debts and obligations. A corporation is governed by its directors functioning as a board. The directors have responsibility for all policy-making decisions required for operation of the corporation. The board of directors is elected by the shareholders. The directors have fiduciary duties to the shareholders and to the corporation. The directors are not guarantors of a corporation's success, however, and are usually required to act with reasonable diligence as a similar person would exercise in similar circumstances. They can be personally liable if injury to the corporation is a result of their breach of duty. Directors also have a duty of loyalty to the corporation. They cannot engage in competitive activities or, generally, without full disclosure, personally gain from a corporate transaction. Moreover, they cannot usurp or appropriate a corporate A corporation is governed by its directors functioning as a board. The directors have responsibility for all policy-making decisions required for operation of the corporation. The board of directors is elected by the shareholders. The directors have fiduciary duties to the shareholders and to the corporation. The directors are not guarantors of a corporation's success, however, and are usually required to act with reasonable diligence as a similar person would exercise in similar circumstances. They can be personally liable if injury to the corporation is a result of their breach of duty. Directors also have a duty of loyalty to the corporation. They cannot engage in competitive activities or, generally, without full disclosure, personally gain from a corporate transaction. Moreover, they cannot usurp or appropriate a corporate business opportunity for their own personal gain. A corporation's officers are appointed and removed by the board. The most commonly seen officers are president, vice president, secretary, and treasurer. The board of directors delegates power and authority to the officers to execute the policies determined by the board. Like directors, officers are also fiduciaries and are subject to the same standard of conduct as directors. This chapter addresses the three groups of people involved in corporate management and governance: shareholders, directors, and officers. Discussion Questions 1. AthleticElite Inc. has 20,000 shares outstanding and nine directors. Its articles provide for cumulative voting a. What number constitutes a quorum of shareholders? b. What number constitutes a quorum of directors? c. If five directors are present at a meeting, how many must vote affirmatively to amend the corporation's bylaws? d. Miguel owns 1,000 shares. If nine directors are being elected, how many votes will Miguel have? CHAPTER OVERVIEW A corporation is owned by its shareholders. Although they own the corporation, however, shareholders play little, if any, role in the day-today operation of a large corporation. Shareholders' activities are generally limited to electing and removing directors and to taking part in extraordinary corporate actions, such as amendment of the articles of incorporation and other fundamental changes to the corporate structure, including approval of mergers and dissolutions. These limited activities take the form of voting at shareholders' meetings. Additionally, shareholders have limited liability. Although their stock might decline in value, they are not liable for debts and obligations of the corporation. One exception to this rule of limited liability exists when shareholders do not respect the corporate entity and commingle its funds with theirs or fail to follow corporate formalities, such as failing to hold elections, meetings, and so forth. In such cases, it is said that the veil of limited liability will be "pierced to prevent fraud and injustice by holding shareholders liable for corporate debts and obligations. A corporation is governed by its directors functioning as a board. The directors have responsibility for all policy-making decisions required for operation of the corporation. The board of directors is elected by the shareholders. The directors have fiduciary duties to the shareholders and to the corporation. The directors are not guarantors of a corporation's success, however, and are usually required to act with reasonable diligence as a similar person would exercise in similar circumstances. They can be personally liable if injury to the corporation is a result of their breach of duty. Directors also have a duty of loyalty to the corporation. They cannot engage in competitive activities or, generally, without full disclosure, personally gain from a corporate transaction. Moreover, they cannot usurp or appropriate a corporate A corporation is governed by its directors functioning as a board. The directors have responsibility for all policy-making decisions required for operation of the corporation. The board of directors is elected by the shareholders. The directors have fiduciary duties to the shareholders and to the corporation. The directors are not guarantors of a corporation's success, however, and are usually required to act with reasonable diligence as a similar person would exercise in similar circumstances. They can be personally liable if injury to the corporation is a result of their breach of duty. Directors also have a duty of loyalty to the corporation. They cannot engage in competitive activities or, generally, without full disclosure, personally gain from a corporate transaction. Moreover, they cannot usurp or appropriate a corporate business opportunity for their own personal gain. A corporation's officers are appointed and removed by the board. The most commonly seen officers are president, vice president, secretary, and treasurer. The board of directors delegates power and authority to the officers to execute the policies determined by the board. Like directors, officers are also fiduciaries and are subject to the same standard of conduct as directors. This chapter addresses the three groups of people involved in corporate management and governance: shareholders, directors, and officers. Discussion Questions 1. AthleticElite Inc. has 20,000 shares outstanding and nine directors. Its articles provide for cumulative voting a. What number constitutes a quorum of shareholders? b. What number constitutes a quorum of directors? c. If five directors are present at a meeting, how many must vote affirmatively to amend the corporation's bylaws? d. Miguel owns 1,000 shares. If nine directors are being elected, how many votes will Miguel have
