Under the Revised Act, if the charter simply states that the corporation elects to have preemptive rights, the shareholders have no preemptive rights with respect to:
A) shares issued as compensation to directors, officers, and employees.
B) shares issued within six months of incorporation.
C) the corporation's unissued shares.
D) Shares issued as compensation to directors, officers, and also employees and shares issued within six months of incorporation.

Question

Under the Revised Act, if the charter simply states that the corporation elects to have preemptive rights, the shareholders have no preemptive rights with respect to:
A) shares issued as compensation to directors, officers, and employees.
B) shares issued within six months of incorporation.
C) the corporation's unissued shares.
D) Shares issued as compensation to directors, officers, and also employees and  shares issued within six months of incorporation.

Quizplus · Accepted Answer

Under the Revised Act, shareholders do not have preemptive rights with respect to shares issued as compensation to directors, officers, and employees, as well as shares issued within six months of incorporation. This is designed to allow corporations flexibility in compensating key personnel and in the initial stages of operation.

Under the Revised Act, If the Charter Simply States That