Worksheet 29.3: Shareholders

Shareholders must approve any corporate decision that would cost more than $10,000. 000.

False

When a company distributes a portion of its income or profits in cash, property or stock to its shareholders in proportion to their shares, it is called:

a dividend

Shareholders have a right to inspect the corporate records for ___ purpose.

a proper

A shareholder ___ have a stock certificate to prove ownership of the stock.

need not

When a single shareholder owns sufficient shares to exercise ___ control over the corporation, that shareholder is called a ___ shareholder and owes ___ duties to the minority shareholders.

De Facto; Majority; Fiduciary

Because shareholders with a very small percentage of shares may not be able to travel to annual meetings, the law allows them to appoint someone else to vote their shares using a ___ authorization form. Management often ___ these.

Proxy; solicits

For shareholders to exercise control, a ___ must be present, either in person or through proxies.

Quorum

If a board of directors declares a dividend to "pay back" investors but that dividend would cause them to have to miss paying several bills as they become due, the members of that board will be personally responsible for any loss to the corporation.

True

The reason that most states either permit or require cumulative voting when electing directors is to:

allow minority shareholders a chance at electing a director.

To encourage shareholders to pay attention to the board's actions, when a shareholder's derivative suit is won, the damages:

are paid in to the corporation's treasury.