A stockholder in a Subchapter S corporation:

a. is not allowed to vote in elections to choose members of the S corporation's board of directors.

b. cannot vote by proxy at stockholders' meetings.

c. cannot become a member of the board of directors.

d. cannot be a nonresident alien.

Question

Tyrone Lam

Business

9 December, 14:06

A stockholder in a Subchapter S corporation:

a. is not allowed to vote in elections to choose members of the S corporation's board of directors.

b. cannot vote by proxy at stockholders' meetings.

c. cannot become a member of the board of directors.

d. cannot be a nonresident alien.

+2

Answers (1)

Know the Answer?

Randall Curry · Answer 1

The answer is C.

Explanation:

The shareholders are the owners of the company while board of directors are the agents (although many directors now have shares in the company) that runs the business on behalf of the shareholders. The problem associated with directors not pursuing the interests of the shareholders is known as agency problem.

Board of directors/directors are to make sure the business run smoothly while the shareholders provide the fund to meet emergencies.

A stockholder in a Subchapter S corporation:a. is not allowed to vote in elections to choose members of the S corporation's board of directors.b. cannot vote by proxy at stockholders' meetings.c. cannot become a member of the board of directors.d. cannot be a nonresident alien.

A stockholder in a Subchapter S corporation:

a. is not allowed to vote in elections to choose members of the S corporation's board of directors.

b. cannot vote by proxy at stockholders' meetings.

c. cannot become a member of the board of directors.

d. cannot be a nonresident alien.