[Solved] Use This Fact Situation to Answer the Related Questions That
Question 13
Multiple Choice
Question 13Use this fact situation to answer the related questions that follow. A and B are the shareholders of a private Ontario company and each holds 50 percent of the issued common shares.There is no shareholder agreement.At a general meeting,A and B,who have had a falling out,cannot agree on anything,from the business of the company in the next year to the election of the directors and appointment of the officers.
In this situation,
A)B must sell his shares to A.
B)A must sell his shares to B.
C)the company is effectively locked or deadlocked as to its operation.
D)the company will simply continue as it had before the meeting.
E)they will go to court and have the court decide the matter.
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- Q11:Use this fact situation to answer the related questions that follow. George,John,Edward,and Mary each own 25 percent of the common shares of a private company that they incorporated five years ago.At that time,they decided that they did not need a shareholders' agreement.Now there has been a falling out between them and the three men have used their majority vote to take away Mary's salary,terminate her employment with the company,and remove her as a director and officer of the company. In this case,Mary has recourse to A)a derivative action. B)an oppression remedy. C)the appraisal remedy. D)winding up the company. E)all of the above
- Q12:Use the fact situation in Q11 to answer the related question that follows. The most likely result of the recourse taken by Mary will be that A)the court will order that Mary's shares be valued and then purchased by the remaining shareholders. B)the court will order Mary and all of her benefits and positions reinstated. C)the court will find that the other three directors have breached their obligation to act in the best interests of the company. D)the court will order the other three out of the company. E)the court will order the company to pay Mary damages.
- Q14:Use the fact situation in Q13 to answer the related question that follows. Assume that A and B have a unanimous shareholder agreement,which provides that for the time being the accountant of the corporation shall have the deciding vote in the event of a deadlock between the shareholders.If the accountant votes with A against B, A)B is bound by the vote. B)B can bring a derivative action. C)B can use the oppression remedy. D)B can move to wind up the company. E)B must sell his shares to A.
- Q15:Use the fact situation in Q13 to answer the related question that follows. Assume that A and B have a unanimous shareholder agreement,which provides that at any time,a shareholder can serve a notice on the other shareholder to buy the other's shares for fair market value.If A and B could not resolve their impasse,then A)B could serve this notice on A. B)A could serve this notice on B. C)if B served this notice on A first,A would have to sell his shares in the company to B at fair market value, D)if A served the notice on B first,B would have to sell his shares in the company to A for fair market value. E)all of the above
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- Q18:Which of the following is NOT a duty of the directors of corporations? A)to adopt by-laws governing the business B)to issue shares C)to call meetings of shareholders D)to take care of the day-to-day business of the corporation E)to declare dividends
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