A freeze-out:
A) occurs when a majority shareholder is "frozen out" by the management regarding such issues as a reduction or elimination of dividends.
B) can be easily reversed in court.
C) results in the minority shareholder having little influence in important corporate issues such as loss of employment.
D) occurs mostly in S corporations.

Question

Quizplus · Accepted Answer

A minority shareholder in a close corporation has little power and, thus, may be "frozen out" (left out of important opportunities) by the majority regarding such issues as a reduction or elimination of dividends as well as a loss of employment.

A Freeze-Out