b a c kn e x t h o m e 36.1 Chapter 36 Objectives  Discuss how a corporation is managed and controlled by the stockholders.  Identify the rights of stockholders.  Specify the responsibilities and powers of directors and officers.  Describe how a corporation is combined or dissolved. © 2002 West Educational PublishingTo accompany Law for Business, 14e, by Ashcroft and Ashcroft

b a c kn e x t h o m e 36.2 Stockholders’ Meeting  Corporation holds annual meeting as per bylaws.  Corporation must give notice of agenda.  A quorum must be present.

b a c kn e x t h o m e 36.3 Stockholders’ Voting Stockholders may vote on such issues as:  Election of directors  Elections to approve or disapprove corporate actions

b a c kn e x t h o m e 36.4  Describe how minority stockholders can vote through the process of: Cumulative voting Voting trusts  How can stockholders vote if they cannot attend the stockholders’ meeting?  Describe what a proxy war is and why it could happen. Minority Stockholders Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss

b a c kn e x t h o m e 36.5  Receive a properly executed stock certificate.  Attend corporate meetings and vote unless otherwise stated.  Receive a proportionate share of profits through dividends.  Sell and transfer shares of stock. Rights of Stockholders

b a c kn e x t h o m e 36.6 More Rights of Stockholders  Right to subscribe for new shares in proportion to the shares already owned.  Right to inspect corporate books.  Right to receive share of assets remaining after liquidation.

b a c kn e x t h o m e 36.7 Powers  Manage and direct the corporation.  Do anything to achieve purpose of corporation.  Elect and appoint officers and agents. Duties  Establish policies.  Exercise discretionary power.  Delegate administration duties to subagents. Liabilities  Bad faith.  Negligence. Directors

b a c kn e x t h o m e 36.8 Dissolution  State may ask for corporate dissolution for  Forfeiture or abuse of corporate charter  Violation of state laws  Fraud in the procurement of charter  Failure to pay taxes for stated number of years  When dissolved, its existence is terminated for all purposes except winding up business.