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B Law 2 Unit 3 Ch 30
Corporate Directors, Officers, and Shareholders
Term | Definition |
---|---|
inside director | A person on the board of directors who is also an officer of the corporation. |
outside director | A person on the board of directors who does not hold a management position at the corporation. |
quorum | The minimum number of members of a decision-making body that must be present before business may be transacted. |
business judgment rule | Immunizes corporate directors/officers from liability for decisions that result in corporate losses/damages as long as they took reasonable steps to become informed, had a rational basis for decisions, and did not have a conflict of interest. |
proxy | In corporate law, a written or electronically transmitted form in which a stockholder authorizes another party to vote the stockholder’s shares in a certain manner. |
stock certificate | Issued by a corporation evidencing the ownership of a specified number of shares in the corporation. |
preemptive rights | Entitle shareholders to purchase newly issued shares of a corporation’s stock, equal in percentage to shares already held, before the stock is offered to outside buyers; maintain their proportionate ownership and voice in the corporation. |
stock warrant | The right to buy a given number of shares of stock at a specified price, usually within a set time period. |
shareholder’s derivative suit | A suit brought by a shareholder to enforce a corporate course of action against a third person. |
watered stock | Shares of stock issued by a corporation for which the corporation receives, as payment, less than the stated value of the shares. |