Issue Shares Without Shareholder Approval In Utah - Issue Shares - Resolution Form - Corporate Resolutions
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FAQ
The owners of a corporation are shareholders (also known as stockholders) who obtain interest in the business by purchasing shares of stock. Shareholders elect a board of directors, who are responsible for managing the corporation.
Yes, you can issue any class of shares, including shares that carry no voting rights.
Business Judgment Rule Where a director's decision is a reasonable one in light of all the circumstances about which the director knew or ought to have known, courts will not interfere with that decision.
The directors must agree to issue shares with a minimum of 75% shareholder approval, otherwise, new shares must first be offered to current shareholders before being sold to third parties.
Shareholder approval will also be necessary when issuing a new class of shares and you do not already have authority (such as when issuing your first class of preference shares when you only have ordinary shares currently).
"The business judgment rule is a presumption that in making a business decision, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.
It's a principle of corporate law that protects board directors and other corporate leaders from legal liability or “frivolous lawsuits” should their actions negatively impact a corporate stakeholder. But remember, they need to have acted ing to their fiduciary duty, in the shareholders' best interests.
Most management actions are protected from judicial scrutiny by the business judgement rule: absent bad faith, fraud, or breach of a fiduciary duty, the judgement of the managers of a corporation is conclusive.