Podcast
Questions and Answers
What happens to a shareholder's stake if they do not subscribe to additional shares issued by a company?
What happens to a shareholder's stake if they do not subscribe to additional shares issued by a company?
- It decreases (correct)
- It doubles
- It increases
- It remains the same
What is the primary aim of a capital raise for a company?
What is the primary aim of a capital raise for a company?
- Welcoming new shareholders (correct)
- Lowering the company's credibility
- Paying off existing debt
- Decreasing the share capital
When equity becomes less than half of the share capital, a company may raise capital to:
When equity becomes less than half of the share capital, a company may raise capital to:
- Reduce the number of shareholders
- Decrease its overall market value
- Avoid dissolution (correct)
- Maximize shareholder dividends
What is one way for existing shareholders to maintain their percentage of participation in a company when new shares are issued?
What is one way for existing shareholders to maintain their percentage of participation in a company when new shares are issued?
How does increasing the nominal value of existing shares affect the share capital of a company?
How does increasing the nominal value of existing shares affect the share capital of a company?
How can companies raise capital by increasing the nominal value of existing shares?
How can companies raise capital by increasing the nominal value of existing shares?
What is a way for partners to provide liquidity to a company during a capital raise?
What is a way for partners to provide liquidity to a company during a capital raise?
In a capital raise involving the issuance of new shares, who may subscribe to the newly issued shares?
In a capital raise involving the issuance of new shares, who may subscribe to the newly issued shares?
What is a method of increasing the capital of a company where tangible and intangible goods are provided by shareholders?
What is a method of increasing the capital of a company where tangible and intangible goods are provided by shareholders?
In the context of a company raising capital, what does the term 'dilution' refer to?
In the context of a company raising capital, what does the term 'dilution' refer to?
How can existing shareholders be given priority for purchasing new shares during a capital raise?
How can existing shareholders be given priority for purchasing new shares during a capital raise?
If a company's articles of association require it, new shareholders in a capital raise may need approval from:
If a company's articles of association require it, new shareholders in a capital raise may need approval from:
Who is a director in a corporation?
Who is a director in a corporation?
What is the role of officers in a corporation?
What is the role of officers in a corporation?
What is the main function of a board of directors (BOD) in a corporation?
What is the main function of a board of directors (BOD) in a corporation?
Where do officers derive their powers from in a corporation?
Where do officers derive their powers from in a corporation?
What distinguishes directors from officers in a corporation?
What distinguishes directors from officers in a corporation?
Who is responsible for making major business and policy decisions in a corporation?
Who is responsible for making major business and policy decisions in a corporation?
What majority is typically required for passing a special resolution to decide on capital raising?
What majority is typically required for passing a special resolution to decide on capital raising?
In what scenario does a capital increase require a unanimous decision?
In what scenario does a capital increase require a unanimous decision?
What information should be stated in a special resolution for capital raising?
What information should be stated in a special resolution for capital raising?
Before a capital increase in cash, what condition must be met regarding the initial share capital?
Before a capital increase in cash, what condition must be met regarding the initial share capital?
What is one of the formalities required for a company to raise capital?
What is one of the formalities required for a company to raise capital?
Besides passing a special resolution, what other step is necessary for capital raising?
Besides passing a special resolution, what other step is necessary for capital raising?
What are the 3 standards applied to directors/officers to determine compliance with the Business Judgment Rule?
What are the 3 standards applied to directors/officers to determine compliance with the Business Judgment Rule?
In Smith v. Van Gorkom case, why did the court find the director grossly negligent?
In Smith v. Van Gorkom case, why did the court find the director grossly negligent?
What is a limitation on the powers of directors mentioned in the text?
What is a limitation on the powers of directors mentioned in the text?
What action by directors is protected by the Business Judgment Rule if there is a conscious decision involved?
What action by directors is protected by the Business Judgment Rule if there is a conscious decision involved?
Which of the following is NOT one of the 3 standards applied to directors/officers to determine compliance with the Business Judgment Rule?
Which of the following is NOT one of the 3 standards applied to directors/officers to determine compliance with the Business Judgment Rule?
What must directors do to comply with the standard of care under the Business Judgment Rule?
What must directors do to comply with the standard of care under the Business Judgment Rule?
