Title 10 Flashcards
(14 cards)
I. The corporation shall bear the costs of appraisal, as a rule.
II. Clearly, the right of appraisal may be exercised when there is a minor change in the charter or articles of incorporation substantially prejudicing the rights of the stockholders.
Only I is true
Any stockholder of a corporation shall have the right to dissent and demand payment of the fair value of his shares in the following instances, except:
A. In case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence.
B. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets.
C. In case of increase or decrease of capital stock.
D. In case of merger or consolidation.
C. In case of increase or decrease of capital stock
I. If within a period of 60 days from the date the corporate action was approved by the stockholders, the withdrawing stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined and appraised by 5 disinterested persons.
II. That no payment shall be made to any dissenting stockholder unless the corporation has unrestricted retained earnings in its books to cover such payment.
Only II is true
The effects of transfer of dissenting shares are the following:
I. The rights of the transferor as a dissenting stockholder shall cease and the transferee shall have all the rights of a regular stockholder.
II. All dividend distributions which would have accrued on such shares shall be paid to the transferee.
Both are true
I. From the time of demand for payment of the fair value of a stockholder’s shares until either the abandonment of the corporate action involved or the purchase of the said shares by the corporation, all rights accruing to such shares, including voting and dividend rights, shall be suspended.
II. If the dissenting stockholder is not paid the value of his shares within 10 days after the award, his voting and dividend rights shall immediately be restored.
Only I is true
I. The dissenting stockholder shall be entitled to receive payment of the fair value of his shares as agreed upon between him and the corporation or as determined by the appraisers chosen by them.
II. Payment may be made regardless if the corporation has unrestricted retained earnings in its books to cover the same.
Only I is true
The following are instances where a dissenting stockholder who demands payment of his shares is no longer allowed to withdraw from his decision, except:
A. The corporation consents to the withdrawal.
B. The proposed corporate action is approved by the SEC where its approval is necessary.
C. The proposed corporate action is abandoned or rescinded by the corporation.
D. The SEC determines that such stockholder is not entitled to appraisal right.
A. The corporation consents to the withdrawal
The following are the instances of appraisal right, except:
A. In case of investing of corporate funds in another corporation or business.
B. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets.
C. In case of merger or consolidation.
D. In case of any amendment to the articles of incorporation.
A. In case of investing of corporate funds in another corporation or business
I. In a close corporation, any stockholder of a close corporation may, for any reason, compel the said corporation to purchase his shares at their fair value, which shall not be less than their par or issued value, when the corporation has sufficient assets in its books to cover its debts and liabilities exclusive of capital stock.
II. The appraisal right may be exercised by any stockholder who shall have voted against the proposed corporate action, by making a written demand on the corporation within 30 days after the date on which the vote was taken for payment of the fair value of his shares.
Both are true
It means that a stockholder who dissented and voted against the proposed corporate action, may choose to get out of the corporation by demanding payment of the fair market value of his shares.
Appraisal right
Right of a dissenting shareholder to demand payment of the fair value of shares in certain situations.
Appraisal Right
Value of shares as of the day before the vote, excluding speculative changes.
Fair Value
Valuation of shares based on their market value before a corporate decision vote.
Pre-vote Value
Neutral third party appointed by SEC to break a deadlock in a close corporation.
Provisional Director
