Question

In the absence of restrictive provisions, what are the basic rights of stockholders of a corporation?

Short answer

The fundamental rights of each shareholder (unless restriction to the contrary) are to share proportionally.

Step-by-step solution

Definition of restrictive Provision

Restrictive Provision can be expressed as banning, restriction,orfurther condition reasonably be anticipated to have a Surviving Corporation Material Adverse Effect.

Basic rights of stockholders of a corporation

1. The Profit and lossshould be shared proportionately
2. Managementshould be shared proportionately, i.e., the voting rights for directors.
3. Corporate assetsupon liquidation should also be shared proportionately.
4. If there is the issue of new stockof the same class should be shared proportionately, it is called the preemptive right.