Removal of directors by stockholders may be with or without cause; which right protects minority stockholders from being deprived of representation?

• A. Appraisal right
• B. Pre-emptive rights
• C. Right to file derivative suit against the majority stockholders
• D. Right of representation to which they may be entitled under the law.

Answer: (D)

When directors can be removed by the stockholders, minority shareholders can lose their voice on the board unless there’s a legal safeguard guaranteeing them representation. The protection is the right of representation to which they may be entitled under the law, which can show up through statutory rules, charter or by-law provisions, or voting mechanisms that ensure minority seats or an opportunity to elect directors. This keeps minority voices in governance even if the majority can remove directors. By contrast, appraisal rights deal with dissenters cashing out, pre-emptive rights shield against dilution, and derivative suits are about suing for wrongful acts—not ensuring board representation.