Question

The RMBCA provides that, absent a conflicting provision in the articles of incorporation, directors may be removed: ______.

a. ​with or without cause by a majority vote of the shareholders.
b. ​with or without cause by a unanimous vote of the shareholders.
c. ​only with cause.
d. ​with cause by a majority vote of the shareholders, and without cause by a unanimous vote.

Answer 1

The RMBCA allows directors to be removed with or without cause by a majority vote of the shareholders, which emphasizes the shareholders' influence in corporate governance.

Step-by-step explanation:

The question relates to the Removal of Directors as per the Revised Model Business Corporation Act (RMBCA).

According to the RMBCA, absent a conflicting provision in the articles of incorporation, directors may be removed with or without cause by a majority vote of the shareholders. The RMBCA allows directors to be removed with or without cause by a majority vote of the shareholders, which emphasizes the shareholders' influence in corporate governance.

This means that if the shareholders hold a majority vote, they have the power to remove directors whether there is a specific reason for the removal (cause) or not (without cause). This provision reflects the importance of the role of shareholders in corporate governance and ensures that they retain a vital control mechanism over the board, which theoretically represents their interests.