Under the Revised Model Business Corporation Act, which of the following actions generally requires shareholder approval?

Answer options:

Declaration of dividends.

Sale of substantially all corporate assets outside the ordinary course of business.

Hiring of corporate officers.

Amending the bylaws (minor administrative changes).

How to approach this question

Shareholders vote on 'DAMS': Dissolution, Amending Articles (fundamental), Mergers, Sale of Assets (substantial).

Full Answer

B.Sale of substantially all corporate assets outside the ordinary course of business.✓ Correct

Fundamental corporate changes, such as a merger, dissolution, or sale of substantially all assets outside the ordinary course of business, require shareholder approval. Day-to-day management (dividends, hiring) is the Board's domain.

Common mistakes

Thinking shareholders declare dividends.

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