Question

AI Medical, Inc., is a private, for-profit corporation that is owned by six shareholders who are not members of the same family but are personally known to one another. They also serve as the directors and officers. To prevent a majority shareholder from dominating the firm, the corporation maya. depart from all formalities required by traditional corporate law.b. hold special shareholders’ or directors’ meetings on an annual basis.c. require more than a majority of directors approve any board action.d. reorganize into a sole proprietorship or partnership.

Answer 1

C) require more than a majority of directors approve any board action.

Step-by-step explanation:

Al Medical, Inc, is a privately held corporation, since its shares are owned by a few shareholders that personally know each other and work together. In order to avoid a shareholder form dominating the firm they can use a supramajority voting requirement. This means that a quorum (for board of director meetings and voting procedures) is more than the majority of the shares, but rather the majority of the board members. This will prevent a shareholder who is able to purchase more than 50% of the shares to decide what should be done since he will always need the physical presence of other directors.