Question

S1: In an open corporation, only in certain case do stockholders have appraisal right of dissenting stockholders while in a close corporation, stockholders can at anytime for whatever reason demand payment of surrendered shares

S2: In the former, there is no restriction in the transfer of shares while in the latter, there is in the form of the right of first refusal of the corporation or stockholders
A. Both are true
B. Both are false
C. Only S1 is true
D. Only S2 is false

Answer 1

In an open corporation, stockholders have appraisal rights in certain cases while in a close corporation, stockholders can demand payment of their surrendered shares for any reason. Open corporations generally have no transfer restrictions on shares, whereas close corporations have a right of first refusal.

Step-by-step explanation:

In an open corporation, stockholders only have the right to dissent and demand payment of their surrendered shares in certain cases. On the other hand, in a close corporation, stockholders can demand payment of their surrendered shares at any time and for any reason.

In terms of stock transfer restrictions, an open corporation typically has no restrictions on the transfer of shares. However, in a close corporation, there is usually a right of first refusal that gives the corporation or other stockholders the opportunity to purchase shares being sold before they can be sold to an outside investor.

So, the correct answer is C. Only S1 is true.