04 -- Corporations—Governance and Fundamental Changes

04 -- Corporations—Governance and Fundamental Changes

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
CPA BEC - STUDY UNIT 4 Corporations – Governance and Fundamental Changes: Core Concepts A. Shareholder Rights 1. Shareholders participate indirectly in corporate policy and management by meeting annually and electing directors. They can act only at a meeting. 2. Shareholders must approve fundamental changes : amendments to the articles of incorporation; all actions of merger or consolidation; and any proposal by directors to sell, lease, or exchange all or substantially all of the corporation’s assets. 3. Shareholders have voting rights that may include cumulative voting, preemptive rights, the right to inspect the books and records, and the right to sue the corporation or on behalf of the corporation. B. Board of Directors 1. A minimum of one director is required. Some states require three, but if there are fewer than three shareholders, the number may be equal to the number of shareholders. Moreover, under the RMBCA, the shareholders, by unanimous agreement, may dispense with a board. But such an agreement is ineffective if the corporation’s shares are publicly traded. Inside directors are also officers or employees of the corporation. An outside director is not an officer or employee of that corporation. C. Board Authority and Actions 1. While the directors formulate overall corporate policy, they are neither trustees nor agents of the corporation. A director cannot act individually to bind the corporation. D.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/29/2010 for the course CBEAM BEC taught by Professor Gleim during the Spring '10 term at De La Salle Lipa.

Page1 / 2

04 -- Corporations—Governance and Fundamental Changes

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online