Shareholders
Only these shareholders may vote at a shareholder's meeting
Shareholders of record on the record date
Each share is entitled to this number of votes
1
Which entities owe the LLC fiduciary duties in a member-managed LLC?
A transaction cannot be set aside merely because a director had a personal interest in the transaction if
(1) Director disclosed materials facts to the disinterest board members who approved the transaction, or (2) the transactions was fair to the corporation
A member of an LLC loses this right when the disassociate from the LLC
The members lose the right to participate in the management.
A proxy can be revoked by
(1) subsequent instrument ;(2) shareholder of record showing up to vote in person
Ally has 50 shares, Johnny has 51 shares. Ally votes in against of the amendment, Johnny votes in favor. Has a majority vote been reached?
Yes
1 vote per share
Which entities owe the LLC fiduciary duties in a manager-managed LLC?
the managers
The business judgment rule is a presumption that a director’s decision may not be challenged if the director
(i) acted in good faith, (ii) with the care that a person would exercise in a like position, and (iii) in a manner the director reasonably believed to be in the best interest of the corporation
These are the three steps of voluntary dissolution.
(1) BOD adopts a proposal to dissolve
(2) Notice to SH + Meeting
(3) Adoption by shareholders majority vote
What steps should a shareholder take to inspect special books and records
(1) written request with 5 days' notice, (2) reasonable time, reasonable location, (3) good faith and proper purpose, (4) records connected with purpose
Why are shares that were issued and outstanding but repurchased not counted in determining the number of votes?
They are not outstanding shares. Instead, they are treasury shares.
What duties are owed?
the duties of loyalty and care
What is required for a settlement of a derivative action to be valid?
Court must approve it
Judicial dissolution of an LLC may be granted on these FOUR grounds
(1) managers/members acted illegally/fraudulently; (2) oppressive and harmful conduct by members; (3) unlawful, (4) not reasonably practicable to carry on the business
When does a shareholder have preemptive rights?
When they are granted in the Articles of Incorporation
Shareholders of ABC Corp cannot transfer their shares. Is this allowed? Why or why not?
No because it is an absolute restraint on alienation
How can an LLC waive the duty of loyalty?
In the operating agreement or articles
What is required for a corporation to dismiss a derivative action?
majority vote; good faith; reasonable inquiry; not in best interest of corporation
Judicial dissolution of a corporationmay be granted on these grounds
(1) deadlock of the directors; (2) illegal/oppressive conduct to shareholders; (3) corporate assets have been watsed or missapplied
These are the steps a dissenting shareholder should take to force the corporation to purchase their shares
(1) notice of intent to assert appraisal rights; (2) notice was given before the meeting, (3) the fundamental change is effectuated, (4) the SH did not vote in favor of the change
What are subscriptions?
Subscription for shares refers to the process where an investor agrees to purchase shares in a company at a specific price, often as part of a new issue of stock
The operating agreement may eliminate the duty of loyalty so long as it is not
manifestly unreasonble
What is one elements required for a shareholder to previal on a rule 10b-5 federal secuties law claim?
fraudulent activity or scheme; damages; scienter;some means of interstate commerce
These are the steps to "winding up" an LLC
(1) written notice to creditors and newspaper; (2) gather cash; (3) liquidate assets; (4) pay creditors; (5) pay shareholders