Three classmates incorporated about a week after graduation.The authorized capital was 500 000 common no-par-value shares.Each classmate 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)relief-from-oppression provision
B)dissent procedure
C)pre-emptive right provision
D)indoor-management rule
E)derivative-action provision

Question

Quizplus · Accepted Answer

The pre-emptive right provision gives existing shareholders the right to purchase new shares before they are offered to the public. This ensures that they can maintain their proportionate ownership of the company without being diluted by new shareholders.

Three Classmates Incorporated About a Week After Graduation