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0 tracked cards Business Associations

A parent company owns 85% of a subsidiary's voting shares and appoints the subsidiary's entire board. It causes the subsidiary to buy supplies from another company the parent wholly owns at above-market prices.
Which statement best describes the parent company's fiduciary-duty exposure?

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A controlling shareholder is liable for every corporate loss while it owns shares. A controlling shareholder avoids all duties by appointing directors to approve its preferred transaction. A controlling shareholder never owes fiduciary duties because shareholders always may vote however they wish. A controlling shareholder can owe fiduciary duties when using control to benefit itself at the expense of the corporation or minority shareholders.

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