Question

When a corporation sells all or substantially all of its assets to another corporation, generally,

Answer 1

Answer:

a. a majority of both shareholders and directors must approve.

Explanation:

Whenever a corporation decides to dispose off all of it's assets or substantially all of it's assets to another corporation, following points are noteworthy

• The Board of directors first have to propose a resolution regarding disposition which has to be approved
• Secondly post approval of the said resolution, the act of "disposition" also requires approval by the corporation's shareholders.
• Such approval must be obtained by majority of the votes cast in it's favor.

In short, disposition of all or substantially all the assets requires an approval of a majority of both shareholders and directors.