Question

Stratego Inc. is a small corporation with nine principals, all of whom are officers, directors, and shareholders of the corporation. The corporation has been so busy trying to turn a profit that it has not held any meetings or elections for the past two years. The company owes $50,000 to a creditor but has only $35,000 in its accounts. Discuss whether the creditor may recover from any of the individuals involved in Stratego.

Why might a shareholder want proxy access to place her nominee on the slate for election to the board of directors?

Adam did not receive a dividend this year. All other shareholders in his class (Common A) received a dividend. What type of action might Adam bring against the corporation? Discuss.

Answer 1

Ans. Right of Creditor: Stratego Inc. is a corporation and a corporation being a legal entity is separate and distinct from its owner. Having separate entity in eyes of law, Stratego enjoy most of the rights and responsibilities that individuals possess like free to enter into contracts, loan and borrow money, sue and to be sued, hire employees, have assets and pay its obligations like taxes etc. So Creditor can sue to Stratego but not claim from any individual involved in Stratego.

Why might a shareholder want proxy access: All stakeholders/shareholders have the right to appoint someone else in his absence to vote for them at any meeting. Proxy can be either through nomination or through the card which shareholder signs to appoint the substitute voter. So in case of absence of his presence a shareholder may want to appoint proxy so that his vote can be registered and his proxy can vote to person of his choice in election of the board.

How to claim unpaid dividend: It is right of shareholder to claim unpaid dividend to him. He can claim this unpaid dividend within seven years from the declaration by contacting the respective fund house or the registrar and transfer agent of the concerned fund house and share with them required information like folio number, KYC and bank account number. Even if he is not paid, then he can bring matte into notice of registrar and in eyes of law.