Ch 30: Corporate Directors, Officers, and Shareholders

election of directors

first board of directors usually appointed by the incorporators thereafter directors are elected by the shareholders.

quorum requirements

vary from state to state, majority of directors

rights of shareholders

voting rights inspect corporate records transfer shares share corporate assets when corporation is dissolved sue on behalf of corp obtain a dividend

shareholder voting requirements

1) a quorum must be present 2) majority vote 3) must prepare voting list prior to meeting 4) cumulative voting may or may not be permitted

director' committees

board of directors may delegate responsibilities to them

director's qualifications

can be a shareholder. responsible for all policy-making decisions necessary to the management of all corporate affairs

liability of directors and officers

corporate directors and officers are personally liable for their own torts and crimes

duty of loyalty

have a fiduciary duty to subordinate their own interests to those of the corp in matters relating to the corporation

board of director's meetings

hold formal meetings with recorded minutes

shareholders' powers

include the approval of all fundamental changes affecting the corporation and the election of the board of directors

corporate officers and execs

normally hired by board of directors and the rights are in employment contracts. duties of corporate officers are the same as those of directors

duty of care

obligated to act in good faith, use good business judgment and act in corp's best interests

shareholders' meetings

occur annually. can vote by proxy(authorizing someone else to vote for you), may submit proposals to be brought up in meeting

conflicts of interest

to fulfill their duty of loyalty directors and officers must make a full disclosure of any potential conflicts between their personal interests and those of the corporation