Three classmates incorporated about a week after graduation. The authorized capital was 500,000 common no-par-value shares. Each took one share and each was a director. If the directors decide to issue more shares from the treasury to raise more capital, which of the following provisions ensures that they keep their proportionate holdings?
A) Pre-emptive right provision
B) Indoor-management rule
C) Derivative-action provision
D) Dissent procedure
E) Relief-from-oppression provision

Question

Quizplus · Accepted Answer

Pre-emptive right provisions allow existing shareholders the right to purchase additional shares before the company offers them to the public, ensuring they can maintain their proportionate ownership in the company.

Three Classmates Incorporated About a Week After Graduation