A director must own at least one (1) share of the capital stock.Group of answer choicesTrueFalse
Question
A director must own at least one (1) share of the capital stock.
- Group of answer choices
- True
- False
Solution
Answer
The statement "A director must own at least one (1) share of the capital stock" is generally True.
In many jurisdictions and under various corporate governance laws, it is a requirement for a member of the board of directors to hold a minimum number of shares in the company to ensure alignment of interests between the directors and shareholders. This requirement can serve to incentivize directors to act in the best interests of shareholders since they have a personal financial stake in the company's performance. However, the specific requirements can vary based on state laws and the company's bylaws, so it is always essential to refer to relevant regulations or company policies for precise details.
In summary, while the requirement holds true in many contexts, checking the specific legal framework governing the company is advisable.
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