Corporations - Shareholder Rights and Liabilities

Corporations - Shareholder Rights and Liabilities -...

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    BUSINESS LAW II Corporations Shareholder Rights & Liabilities
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    Shareholder Meetings Annual Meetings Special Meetings Held when special and/or rapid  shareholder action is required, such as for  approval of a merger proposal Don’t want to, or can’t, wait for the annual  meeting
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    Notice of Shareholder Meetings Shareholders must be given notice of all  shareholder meetings Annual Meetings.  No notice of items to  be discussed is required, unless the  meeting will raise extraordinary issues,  such as amendment of the bylaws Special Meetings.  The purpose of the  special meeting  must  be included in the  notice
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    Shareholder Meetings – Quorum A quorum of the outstanding shares  must be present at the meeting A quorum is a majority, unless the  articles require greater than a majority If there is more than one class of stock,  then a quorum of each class’s shares  must be present
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    Shareholder Meetings –  Voting Unless otherwise provided in the  articles, a majority vote is all that is  required to pass a resolution If there is more than one class of stock  entitled to vote, then a majority vote of  each class is required
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    Shareholder Meetings –  Full Participation Shareholders can speak for or against  proposed resolutions They can offer resolutions and ask  questions of the officers Subjects may include protecting or  enhancing the rights of minority  shareholders, promoting social issues,  limiting corporate charitable contributions,  banning the manufacture of weapons,  protecting the environment, etc.
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    Unanimous Consent A meeting may be avoided if all  shareholders consent, in writing, to a  proposed or completed corporate action
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    Shareholder Control Devices Voting Trusts   Shareholders transfer their shares to one or more  voting trustees in exchange for voting trust certificates The voting trustees vote the shares, and the voting  trust certificate holders receive dividends If several shareholders can gain control over the  corporation by pooling their votes, they may decide to  create a voting trust The trust allows them to control the corporation even if  they develop disputes that threaten their unanimity
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    Shareholder Control Devices Voting Trusts Voting trust must be made public Under the MBCA, they are limited to a  10 year duration, which can be  extended another 10 years by vote of  the shareholders
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    Shareholder Control Devices Shareholder Voting Agreements This is a written agreement between  shareholders indicating how they will vote For example, they may agree to vote for each other 
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This note was uploaded on 05/04/2008 for the course BUAD 495 taught by Professor Mamun,todd during the Spring '07 term at USC.

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Corporations - Shareholder Rights and Liabilities -...

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