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Provide a 5 pages analysis while answering the following question: Business Association Problems. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is requi
Provide a 5 pages analysis while answering the following question: Business Association Problems. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. It is evidently clear from the discussion that the Model Business Corporation Act (MBCA), for example, requires the shareholder contemplating a derivative suit to first make a written demand to the Board of Directors to act on the subject of the complaint and commence only the suit after 90 days unless there was an earlier rejection or it is contingent upon the shareholder to institute the action immediately without waiting for its expiry because of the likely intervention of irreparable injury to the company. The importance of a prior demand was impressed by the US Supreme Court in the case of Hawes v Oakland 104 US 450 (1881). The shareholder, in this case, instituted an action against the City of Oakland, the Contra Costa Waterworks Company of which he was a shareholder, and its directors for acts inimical to the company and its shareholders. These acts constitute, among others, of providing the city, free of charge, of water beyond that prescribed by law. The US SC sustained the lower court and dismissed the appeal on the grounds that, among others, the shareholder failed to show that he had exhausted all remedies to settle his grievances against the company in accordance with company grievance mechanisms. The Court declared that “…before the shareholder is permitted in his own name to institute and conduct a litigation which usually belongs to the corporation, he should show to the satisfaction of the court that he has exhausted all the means within his reach to obtain, within the corporation itself, the redress of his grievances, or action in conformity to his wishes. He must make an earnest, not a simulated effort with the managing body of the corporation to induce remedial action on their part, and this must be made apparent to the court”.
