Corp

Question 1

What action may shareholders bring against a corporation?

Answer 1

direct or derivative action

Question 2

Must a shareholder make a demand on the board before filing action against the corporation?

Answer 2

Yes for derivative action, no for direct action

Question 3

When can shareholders inspect corporation’s books?

Answer 3

For proper purpose

On five days’ written notice, stating intent (can bring S’s attorney or accountant along)

Question 4

In a closed corp, do shareholders have right to receive dividends?

Answer 4

Generally not, unless declared by the board.

Good faith decision not to declare dividends may be using those funds to grow the corp.