Question-4 You work for Alpha Corporation and are in charge of handling the shar

Question

Question-4

You work for Alpha Corporation and are in charge of handling the shareholders annual meeting, which is scheduled for March 15. Right now, the company needs to elect new directors, hire a new chief executive officer, amend the articles of incorporation and buy a new asset worth $25,000. You intend to send the notice of shareholder meeting out on February 1. There are 200 stockholders of record on February 1 and 225 stockholders of record on March 15. The articles and bylaws do not set a record date.

a. On which matters are the stockholders entitled to vote?

b. How many stockholders are entitled to vote at the meeting?

Explanation / Answer

a. Stockholders can vote on matters of matters of corporate policy and who will make the board of directors.

The board of Directors, as selected by the stockholders will select the new CEO. The stockholders vote is not required for electing new CEO.

Any change in corporate policies and article of incorporation or memorandum of association will require the approval of stockholders. Thus a stockholder is entitled to vote for changes in articles of incorporation.

Buying new assets of $25,000 will not require stockholder's approval as it is a basic management issue.

b. Usually, all stockholders on a record date are entitled to vote. The record date is a specified day preceding the shareholder meeting. As the record date is not mentioned or specified in this case, it will be the date on which the notice will be send out. Here the date is February 1 and the number of stockholders on that date is 200.

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