Question

Review Question on the topic of Close Corporation - Section 95

Scenario:

ABC Corporation, a close corporation with five shareholders, is facing a legal dispute regarding the appointment of directors in a special shareholders' meeting. Shareholder A, who owns 60% of the shares, intends to nominate a director without consulting the other shareholders or following the proper procedures stated in the corporation's bylaws. Shareholders B, C, D, and E, each owning 10% of the shares, are opposing this move and argue that the nomination should be done in accordance with the law and the corporation's bylaws.

Given this scenario, answer the following questions:

1. Discuss the concept of a close corporation under Philippine law.
2. Explain the significance of Section 95 of the Corporation Code in the context of the dispute mentioned.
3. Analyze the roles and rights of the shareholders and directors in a close corporation.
4. Based on the scenario, should Shareholder A's nomination be considered valid? Provide reasons for your answer.