Chapter 40

A director who is also an officer of the corporation

A director who does not hold a management position

This is the minimum number of members of a body of officials or other group that must be present for business to be validly transacted. Some state statutes specifically allow corporations to set a ... at less than a majority but not less than one-third of the directors.

Under this rule, a corporate director or officer will not be liable to the corporation or to its shareholders for honest mistakes of judgment and bad business decisions.

A latin term from procurare meaning "to manage or take care of". The agent's formal authorization to vote the shares.

This is an agreement (a trust contract) under which a shareholder assigns the right to vote their shares to a trustee, usually for a specified period of time. The trustee is then responsible for voting the shares on behalf of all the shareholders in the trust. The shareholder retains all rights of ownership except the power to vote the shares.

Corporations commonly issued these that evidence ownership of a specified number of shares in the corporation. Only a few jurisdictions still require physical ... ..., and shareholders there have the right to demand that the corporation issue ... (or replace those that were lost or destroyed).

A shareholder receives a preference over all other purchasers to subscribe to or purcase a prorated share of a new issue of stock. Generally, these must be exercised within a specific time period (usually thirty days).

These are rights given by a company to buy stock at a stated price by a specified date. Usually, when preemptive rights exist and a corporation is issuing additional shares, it gives its shareholders ... .... They're often publicly traded on securities exchanges.

The right of shareholders to bring a lawsuit if corporate directors fail to do so. The right of shareholders to bring a ... action is especially important when the wrong suffered by the corporation results from the actions of the corporate directors and officers. For obvious reasons, the directors and officers would probably be unwilling to take any action against themselves.

When a corporation issues shares for less than their fair market value. Usually, the shareholder who receives ... ... must pay the difference to the corporation (the shareholder is personally liable). In some states, the shareholder who receives ... ... may be liable to creditors of the corporation for unpaid corporate debts.