Final answer:
A quorum generally requires a majority of members to be present for legal business transactions. For a company with 100,000 shares, more than 50,000 shares represented would be needed for a quorum. Investors 1 and 2 together do not hold a majority and would need additional support.
Step-by-step explanation:
To determine how many members of the Board will constitute a quorum for the transaction of business, it's important to understand that a quorum typically requires a majority of members. This means that more than half of the members need to be present to legally conduct business. If we apply this general ruling to a particular scenario such as the Darkroom Windowshade Company, which has a total of 100,000 shares held by investors, we would look for the minimum number of investors representing over half of the shares to make decisions. However, if the company bylaws specify a different amount for a quorum, that would take precedence.
Under the assumption of a simple majority, investors 1 and 2 combined hold 38,000 shares (20,000 + 18,000), which is not a majority of the outstanding shares, so they would not be able to always get their way in how the company is run. They would need more investors to join them to reach a majority and influence the company's decisions, as 50,001 shares would constitute over half of the total shares and allow changes to management or other significant business transactions.