Chapter 44 provides knowledge of shareholders’ rights and liabilities. After completing this chapter, students will be able to: Describe the rights and powers of shareholders, how they exercise their powers, and special liabilities; identify classes of shares; explain how shareholders may enforce corporate rights of actions, especially against managers. | Corporations History & Nature of Corporations Organizational and Financial Structure of Corporations Management of Corporations 10 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Corporations Shareholders’ Rights & Liabilities Securities Regulation Legal & Professional Responsibilities of Auditors, Consultants, and Securities Professionals 10 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Shareholders’ Rights and Liabilities P A E T R H C 44 “Management have been allowed to act like owners. But it is the stockholders who own companies and the stockholders are just beginning to realize it.” Pickens, Sunday Times (London, Dec. 1, 1985) Learning Objectives Shareholders’ meetings Shareholders’ and dissenters’ rights Distributions to shareholders Shareholders’ lawsuits Shareholder liability Dissolution and termination of corporations 44 - Shareholders are the owners, but not the | Corporations History & Nature of Corporations Organizational and Financial Structure of Corporations Management of Corporations 10 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Corporations Shareholders’ Rights & Liabilities Securities Regulation Legal & Professional Responsibilities of Auditors, Consultants, and Securities Professionals 10 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Shareholders’ Rights and Liabilities P A E T R H C 44 “Management have been allowed to act like owners. But it is the stockholders who own companies and the stockholders are just beginning to realize it.” Pickens, Sunday Times (London, Dec. 1, 1985) Learning Objectives Shareholders’ meetings Shareholders’ and dissenters’ rights Distributions to shareholders Shareholders’ lawsuits Shareholder liability Dissolution and termination of corporations 44 - Shareholders are the owners, but not the managers of a corporation Shareholder rights in a publicly-owned corporation are limited to electing and removing directors at the annual meeting, approving vital matters at special meetings, and ensuring that management actions are consistent with state corporation statutes, bylaws, and articles of incorporation Overview 44 - State statutes and the Model Business Corporation Act (MBCA) require an annual meeting of shareholders to be held Primary purpose: elect directors The MBCA permits shareholders to act without a meeting if all of the shareholders entitled to vote consent in writing to the action. Special meetings of shareholders may be held whenever a corporate matter arises that requires immediate shareholders’ action Example: merger, dissolution Notice of a special meeting must list the purpose of the meeting Notice must be given to shareholders of record (entitled to vote) as of a date fixed by the board of directors Notice of meetings must be given to shareholders of .
