18 Questions
What is the purpose of the Delaware Statute in relation to Officers and the duty of care?
To protect Outside Directors from negligence claims
What is the primary purpose of D & O insurance?
To cover legal defense fees and judgments
What must a Director do to avoid personal liability if a decision proves to be disastrous?
Dissent from the decision in writing
What is not typically covered by D & O insurance?
Intentional torts
What is the purpose of filing a written dissent with the secretary before the meeting is adjourned?
To avoid personal liability
Why do larger companies often purchase D & O insurance?
As a necessity to attract and retain Directors and Officers
What is the term for an action that exceeds a corporation's express or implied powers?
Ultra Vires Act
What is a prerequisite for a shareholder to file a derivative lawsuit?
Must be a shareholder at the time of the act
What is the purpose of a shareholder derivative lawsuit?
To enforce a corporation's right against a third party
What is the timeframe within which a corporation must respond to a written demand made by a shareholder?
90 days
What is the term for the rights of a shareholder to purchase additional shares of a corporation?
Preemptive rights
What is the term for a lawsuit filed by a shareholder to enforce a corporation's right against a third party?
Shareholder Derivative Lawsuit
What is the primary purpose of Delaware's Statute, §102(b)(7)?
To limit or eliminate directors' personal liability for monetary damages for breach of fiduciary duty
Which of the following is an exception to the limitations on directors' personal liability in Delaware's Statute, §102(b)(7)?
Breach of loyalty
How does California's Statute differ from Delaware's Statute?
It is more restrictive
What is the consequence of an unexcused pattern of inattention under California's Statute?
Liability for an abdication of corporate duties
What is the primary duty of directors that is protected by the Business Judgment Rule?
Duty of care
Which of the following is a limitation on the Business Judgment Rule?
All of the above
Test your understanding of the business judgment rule and the duty of care, including statutory limitations on directors' liability for breach of duty. Learn about Delaware's statute §102(b)(7) and its implications on corporate governance. Assess your knowledge of corporate law and governance principles.
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