a)Right to Inspect Corporate Records
--if done in good faith for purposes germane to his position as dir, this right is absolute.
b)Duty of Care
--dirs must exercise the care of an ordinarily prudent and diligent person in a like position, under similar circumstances. There is no liability (absent a conflict of interest, bad faith, illegality, or gross negligence) for errors of judgment (business judgment rule--the rebuttable presumption that action was taken on an informed basis, in good faith and exercising reasonable care), but the dir must have been reasonably diligent before the rule can be invoked (Shlensky
)
1)The duty of care requires:
I)Education
--a dir should acquire at least a rudimentary understanding of the business of the corporation;
ii)Information
--a dir is under a continuing obligation to keep informed about the activities of the corp;
iii)Participation
--dirs must “generally monitor” corporate affairs, but need NOT involve themselves in the day-to-day operations; (i.e. they should attend board of dirs meetings with reasonable regularity).
iiii)Inquiry
--a dir has a duty to inquire when circumstances would alert a reasonable person for the need of inquiry.
iiiii)Action
--where wrongdoing is revealed, a dir should object, correct, or resign. Object to the course of conduct, steer toward correction, and resign if it isn’t corrected.
2)Extent of liability
--dirs are personally liable for corporate losses directly resulting from their breach of duty or negligence in falling to discover wrongdoing. a director may seek to avoid being held personally liable for acts of the board by recording his dissent.
I)Many statutes permit the articles to abolish or limit dir’s liability for breach of the duty of care absent bad faith, intentional misconduct, or knowing violation of law.
3)Defenses to liability
--these include good faith reliance on management or expert’s reports. Disabilities may be considered in determining whether the dir has met the standard of care.
c)Duty of Loyalty
--a catch-all duty designed to prevent unfairness--the duty to act in good faith (BJR applies). Application:
1)Self-dealing transactions
I)Common Law:
(1)early absolute prohibition against self-dealing renders transactions void or voidable;
(2)permissive self-dealing: dirs and officers may contract with the corp if (a)done in “strictest good faith.”; (b)with full disclosure; and (c)consent of “all concerned.”
[1]--burden of proof is on the dir to establish good faith, honesty & fairness;
[2]--courts weigh self-dealing transactions with “closest scrutiny”
(3)self-dealing prohibition also applies to intercorporate transactions where dirs are common.
ii)Statutory (example)
:
(1)quasi-safe harbor approach (Iowa statute)--transaction is not void or voidable because of dirs’ interest, if either:
[1]--interest is disclosed and approval is made without counting the vote of the interested dir.
[2]--interest is disclosed to shs and shs authorize
[3]--transaction is fair and reasonable
(2)Note--dir must still establish that he acted in good faith, honesty, and fairness
2)Domination of subsidiary by parent
--courts look at the transaction to see if self-dealing has occurred. Example (Sinclair Oil
):
I)declaration of dividends shared pro rata was NOT self-dealing; BJR applies
ii)contract between parent and sub was self-dealing; apply intrinsic fairness test
3)Manager’s compensation
:
I)Ordinary corporations
--conflicts are inevitable but all firms need to set compensation. The burden of proof is placed on challengers as a matter of convenience.
ii)Close corporations
--the income generated by the firm may be diverted to salaries, so there is an option for self-dealing by the parties in control to take tax-advantaged compensation in the form of salaries (taxed once) as opposed to dividends (taxed twice).
d)Statutory Duties and Liabilities
--in addition to general duty of care, federal and state laws also impose certain duties and liabilities, e.g., registration requirements under the Securities Act of 1933, liability for rule 10b-5 violations, liability for illegal dividends. Some statutes also impose criminal liability on corporate managers for unlawful corporate actions.
Другие работы по теме:
Civil Liberties Essay Research Paper Civil LibertiesThe
Civil Liberties Essay, Research Paper Civil Liberties The term civil liberties refers to the “freedoms that individuals enjoy and that governments cannot invade”. These rights include a persons freedom of speech and religion.
Equal Rights Essay Research Paper Throughout history
Equal Rights Essay, Research Paper Throughout history equal rights has always been a major issue in the United States, and around the world. People have fought and even died to protect their rights and the rights of others in this country. Most people assume that colored citizens are the only one?s that are affected by the lack of equal rights, but that?s not true.
Ethics 3 Essay Research Paper EthicsThere are
Ethics 3 Essay, Research Paper Ethics There are many people in the world today that want their lives to end in a certain way. Some want to fulfill a dream or do something they weren t able to do before; yet there are some people who want to feel like they have done something for others which have helped another person in there live today.
The Chartist Movement Essay Research Paper The
The Chartist Movement Essay, Research Paper The Chartist Movement was one of rights. The workers felt they had worked hard for the rights than those of higher classes had. However, they were not arguing for more money or more land, all they wanted was universal suffrage. The workers believed it was time to put the unrest, to rest.
Bill Of Rights And Constitution Essay Research
Paper First of all as for the long quote on the term paper handout, I would have to agree with it due to the fact that it was probably written back in the days and back then this quote would justify many issues and arguments. I agree with the quote due to the fact that there were many criminals back then and harder to control, such as the Ku Klux Klan where they had control over certain things.
Women In Saudi Arabia Victims Of Discrimination
Essay, Research Paper Saudi Arabia, which is located in the Middle East, is known as a religious state where religion and government are one in the same. As the Islamic Religion is the government, its book, the Quran (Koran) is the foundation and structure of the laws in Saudi Arabia. As dictated in the Koran, men hold all governmental positions while the women stay home and perform domestic duties.
Citizenship Essay Research Paper 1 What is
Citizenship Essay, Research Paper 1. What is citizenship? According to The Citizenship debates, by the term citizenship, we must understand not only a bundle of formal rights, but the entire mode of incorporation of individuals and groups into the society (251). Citizenship is important because it has become a legal status carrying with it rights to certain things?perhaps immunities, perhaps possessions, perhaps expectations?available or available to many kinds of person for many kinds of reasons (37).
Nurse Essay Research Paper The occupation of
Nurse Essay, Research Paper The occupation of a Registered Nurse seems to take an enormous amount of responsibility. The duties of a Registered Nurse are many. The R.N. “helps individuals and groups take steps to improve or maintain their health.” Other duties of a Nurse is to administer medications, assist in convalescence and rehabilitation, and “instruct patients and their families in proper care.” Nurses also “assist physicians during treatments and examinations.” Most important of all the nurse “helps people stay well and care for sick and injured people”(O.O.H. 159).
What Do Aniamls Mean To Us Essay
, Research Paper Anthony Jones WHAT DO ANIMALS MEAN TO US? When it comes to dealing with animals humans tend to think that they can do whatever they want. Animals should have rights just as humans have rights. However, animal rights are disregarded as we continue to eat and use them in experiments. We view animals not as living creatures, but as objects to do with as we please.
The Rules And Duties Of Citizens And
Rulers According To Plato, Machiavelli And Aristotle Essay, Research Paper Political philosophy is part of the most influential and enduring texts in all of history. The Aristotelian tradition, following from the philosophy of Plato and continuing in the writings of other modern political philosophers such as Machiavelli, has formed the setting against which all succeeding political and moral philosophy has founded its orientation.
Plan To Improve Oversight Of Financial Reporting
Process Essay, Research Paper 10 point plan to improve oversight of financial reporting process. 10 point plan to improve oversight of financial reporting process The New York Stock Exchange and The Blue Ribbon Committee saw a need for improvement in corporate auditing. They released a report of IO far-reaching recommendations intended to improve the quality of corporate financial reporting, Point # 1.
Market Research Essay Research Paper Part A
Market Research Essay, Research Paper Part A 1. Directors AJ lane, WJ Locke, JF Kelly, JR Cadwaallader, DG Lane, HA Lynch, IA Pollard, RC Milne 2. Total Sales = $475,264,000 (1997) (Before Abnormal items) 3. Sales revenue for the consolidated entity, for the year ended 30 June 1996, was $449745000. 4. Equity method used when company has significance influence but not control of investee company OPSM use consolidation method which means it has control over other investee. 5.
Problems Caused By Mercantilism For The American
Colonists Essay, Research Paper Problems caused by mercantilism for the american colonists Essay submitted by deanna dunker According to the theory of mercantilism, the colonies only existed to serve the
Does Voting Make Sense Essay Research Paper
To be an American means that certain rights are guaranteed by the government, but these rights comes with certain duties. The first duty as an American citizen is not to serve in the armed forces; it is not to pay taxes. The first duty as an American is to get out there and rock the vote. Although the ability to vote is what separates America from other countries, many people choose not to fulfill their duties and give up their right to vote.
Bliar Witch Project Essay Research Paper
“The Blair Witch Project” The movie “The Blair Witch Project” is one that seemed to cause a commotion amongst film reviewers and the actual public. It’s a very interesting film about three filmmakers who are actually making the film that you watch. The emotion in the film leads the viewers to believe that it’s real.
Malcolm X Essay Research Paper Malcolm X 2
Malcolm X Essay, Research Paper Malcolm X, a character for fighting for the rights of the blacks and trying to protect the Civil Rights of blacks. But before he became the well-respected man that he is he was a thief and drug user. I believe he felt that he more than fulfilled his duties as a Negro as of what was expected of them back then.
Negative And Positive Rights Essay Research Paper
Throughout societies in history and presently, we can see the employment of two primary forms of rights: positive and negative. The bulk of the following attempts to highlight the differences between the two. The proponents of each will also be discussed.
Capitalism Essay Research Paper The protection from
Capitalism Essay, Research Paper The protection from force, that is, the protection of individual rights, would be achieved through the use of a police force to protect the rights of citizens at home; a military, to protect the rights of citizens from foreign aggression; and a court system to enforce contracts and settle disputes between citizens.
Freedom And Rights Essay Research Paper Freedom
Freedom And Rights Essay, Research Paper Freedom and Rights How would you feel if your individual rights and freedoms were stripped from you during a national crisis? In many countries, the people s individual rights and freedoms are supposed to be protected by the government. But, in some cases, those individual rights and freedoms were taken away from the people during a national crisis.
The Bill Of Rights Essay Research Paper
The Bill of Rights Bill of Rights The first ten amendments to the US constitution are called the Bill of Rights because they provide basic legal protection for individual rights. The
Government 2 Essay Research Paper In order
Government 2 Essay, Research Paper In order to have a good government, the people are the most important part. It is ultimately the people who have to live with what they choose. The government has to protect the people’s natural rights and beliefs. It has to do whatever is necessary to look out for the peoples best interests.
What Is Human Rights Abuse Essay Research
Paper What are Human Rights Abuses? Human Rights Abuses are occurrences where there are violations on an individual’s right to act in a way to make moral decisions. Tis includes violations against an individual’s political rights,worker rights, and freedom of religion,speech, press,peaceful assembly and association.
Organizing the corporation
A.FORMALITIES IN ORGANIZING CORPORATION 1.CERTIFICATE OR ARTICLES OF INCORPORATION --state law governs the content of the articles, which are filed with the secretary of the state. Usually, the articles must specify the corp name, number of shares and classes of stock authorized, address of the corp’s initial registered office, name of initial registered agent, and the name and address of each incorporator.
Transforming America With The Civil Rights Movement
Essay, Research Paper Transforming America with the Civil Rights Movement The civil rights movement transformed American society in to a color conscience society and started the anti-free speech political correct movement that we are seeing today. The civil rights movement gave African Americans the right to be treated as regular citizens but it was the urban riots of the mid-1960s and the voiced black rage that changed the tone of the civil rights movement.
Animal Rights Essay Research Paper Nonhuman animals
Animal Rights Essay, Research Paper Non-human animals are given rights only because of their interactions with human beings. Without involvement with humans, animals do not deserve rights. It is through this interaction with humans that animals are even given moral consideration. We do not give rights to a rock simply because it is a creation of Mother Nature, similarly non-human animals do not have rights unless it is in regards to humans.
Human Rights Essay Research Paper Human RightsThroughout
Human Rights Essay, Research Paper Human Rights Throughout history, people?s human rights have been violated, but efforts have also been made to address the violations, and protect their rights. Human rights are rights as regarded as belonging fundamentally to all persons. Today, everyone is entitled to the same rights.
The Churches Stance On Social Order Essay
, Research Paper The Churches Stance for social order. Every day human interdependence grows more tightly drawn and spreads by degrees over the whole world. As a result the common good, that is,
My Duties about the house
My name is ...... I am 17 years old. I have already finished my school. My duties about the house are to clean the rooms, to wash the dishes after meals, to do shopping.