Which of the board’s actions fall into their express power and which are their implied power? Please explain why the actions would be categorized that way.
Widget Corporation is the manufacturer of many popular children’s toys but have seen a great decrease in sales and the board of directors is worried that the business may no longer be viable. The board decides to aggressively sue other toy manufacturers that have likely been infringing on Widget’s intellectual property, enter into a joint venture with a another company to build a new factory to reduce costs, and make large and notable donations to children hospitals as part of a PR campaign to raise the corporation's image. Additionally, the board decides to start manufacturing medical equipment to make up for the projected shortfalls in budget, even though the corporation was formed to make toys. Some shareholders are upset and sue the board of directors.
(a) Which of the board’s actions fall into their express power and which are their implied power? Please explain why the actions would be categorized that way.
(b) Would the ultra vires doctrine play a role in the shareholders suit again the board? Why or why not?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
