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Questions and Answers
What is the primary purpose of a capital raise for a company?
What is the primary purpose of a capital raise for a company?
- Avoiding dissolution when equity decreases (correct)
- Minimizing credibility with stakeholders
- Decreasing the share capital
- Increasing the number of directors
How can companies raise capital by issuing new shares?
How can companies raise capital by issuing new shares?
- Decreasing the share capital
- Diluting the existing shareholders
- Integrating existing shareholders
- Obtaining shareholder approval (correct)
In the given example, what happens to the company's share capital when 1,000 new shares of €100 each are issued?
In the given example, what happens to the company's share capital when 1,000 new shares of €100 each are issued?
- It doubles to €1,000,000
- It increases to €600,000 (correct)
- It remains at €500,000
- It decreases to €400,000
What may happen to existing shareholders when a company integrates new shareholders through a capital raise?
What may happen to existing shareholders when a company integrates new shareholders through a capital raise?
When can new shareholders be subject to approval by existing shareholders?
When can new shareholders be subject to approval by existing shareholders?
What could be a consequence for a company if its equity falls below half of the share capital?
What could be a consequence for a company if its equity falls below half of the share capital?
What is the consequence of making a capital increase without considering the pre-emptive rights of shareholders?
What is the consequence of making a capital increase without considering the pre-emptive rights of shareholders?
Who is responsible for appointing the contribution auditor for contributions in kind?
Who is responsible for appointing the contribution auditor for contributions in kind?
What happens if there is no valuation by a contributions’ auditor for contributions in kind?
What happens if there is no valuation by a contributions’ auditor for contributions in kind?
What is the time limit for depositing funds paid as a contribution in cash?
What is the time limit for depositing funds paid as a contribution in cash?
Which reserves can be utilized when incorporating reserves in a capital raise?
Which reserves can be utilized when incorporating reserves in a capital raise?
What happens if shareholders are not obliged to subscribe to the new shares in a capital raise?
What happens if shareholders are not obliged to subscribe to the new shares in a capital raise?
What is the main responsibility of a corporation's board of directors?
What is the main responsibility of a corporation's board of directors?
Who appoints officers in a corporation?
Who appoints officers in a corporation?
What is the role of an officer in a corporation?
What is the role of an officer in a corporation?
In a corporation, who manages the corporation's business and affairs?
In a corporation, who manages the corporation's business and affairs?
What distinguishes a director from an officer in a corporation?
What distinguishes a director from an officer in a corporation?
Where do officers in a corporation receive their powers from?
Where do officers in a corporation receive their powers from?
What type of resolution is required for deciding on a capital raising according to the text?
What type of resolution is required for deciding on a capital raising according to the text?
In a general meeting of shareholders, what majority is usually required for a special resolution on capital raising?
In a general meeting of shareholders, what majority is usually required for a special resolution on capital raising?
What is required when increasing the nominal value of shares in terms of decision making?
What is required when increasing the nominal value of shares in terms of decision making?
What key information must be included in the special resolution for a capital increase according to the text?
What key information must be included in the special resolution for a capital increase according to the text?
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?
Which step is necessary after passing the special resolution for capital raising?
Which step is necessary after passing the special resolution 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 the case of Smith v. Van Gorkom, why was the director found to be grossly negligent?
In the case of Smith v. Van Gorkom, why was the director found to be grossly negligent?
What are some limitations on the powers of directors mentioned in the text?
What are some limitations on the powers of directors mentioned in the text?
What is the significance of the 'Business Judgment Rule' for directors and officers?
What is the significance of the 'Business Judgment Rule' for directors and officers?
Why is it important for directors not to engage in self-dealing or conflicts of interest?
Why is it important for directors not to engage in self-dealing or conflicts of interest?
What is the primary duty of care expected from directors and officers in a corporation?
What is the primary duty of care expected from directors and officers in a corporation?
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