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shareholders review - • Have a fiduciary duty to minority...

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Chapter Review 1. The Securities and Exchange Commission (SEC) regulates the relationship between publicly held corporations and their shareholders. The SEC plays a less active role in privately held - corporations. 2. Shareholders have the right to: Receive annual financial statements Inspect and copy the corporation’s records (for a proper purpose) Elect and remove directors; and Approve fundamental corporate changes, such as a merger or a major sale of assets. 3. Virtually all publicly held companies solicit proxies from their shareholders. A proxy authorizes someone else to vote in place of the shareholder. 4. Under certain circumstances, public companies must include shareholder proposals in the proxy statement. 5. A shareholder who objects to a fundamental change in the corporation can insist that her shares be bought out at fair value. This protection is referred to as “dissenters’ rights.” 6. Controlling shareholders: May not enter into unfair business transactions with the corporation
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Unformatted text preview: • Have a fiduciary duty to minority shareholders • May not exclude minority shareholders from beneficial arrangements involving stock; and • Are prohibited from expelling minority shareholders, unless the expulsion is done for a legitimate business purpose 7. Congress, the NYSE, and Nasdaq have all taken steps to prevent management abuses. These new regulations require that companies adopt effective financial controls. They also require more independent directors on the board as a whole and on important subcommittees. 8. A derivative lawsuit is brought by shareholders to remedy a wrong to the corporation. The suit is brought in the name of the corporation, and all proceeds of the litigation go to the corporation. 9. If a group of shareholders all have the same claim against the corporation, they can join together and file a class action, rather than suing separately....
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  • Spring '10
  • SuzieMays
  • Corporation, Public company, U.S. Securities and Exchange Commission, Securities and Exchange Commission

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