BA Flashcards
Formation
De jure corporation - file articles of incorporation:
- initial agent’s name
- street address – office
- corporation name
- authorized number of shares
- name/address of incorporators
De facto corporation
Corporation by estoppel
Piercing the corporate veil
- alter ego
- undercapitalization
- fraud
- estoppel
Pre-incorporation liability
Promoter: personal liability
corporation: not liable unless adopt contract or accept benefit
Board meetings
- quorum required
- presence by any means
- withdrawal can break quorum
- dissent and abstention
Duty of care
- reasonable prudent person standard
- business judgment rule: good faith + corporation’s best interests
Duty of loyalty - no Conflict of Interest
No self-dealing
- presumed unfair; but
- conflict can be cured if authorized/approved and fair
No usurpation of corporation opportunity
- ok if good faith rejection &
- full disclosure
- remedy: disgorge profits
No unfair competition
Rights of shareholders
Meetings
Voting
Inspection
DividendsS
Shareholder lawsuits
direct suit
derivative suit on corporation’s behalf
shareholder duties
- general rule: no fiduciary duties
- Controlling shareholder: owes a duty of care and loyalty
Agency formation
agreement
benefit of principal
control of agneet
all contract formalities not required
Agent duties
duty of care (BJR)
duty of loyalty - no conflicts
- no self-dealing
- no usurp principal opportunity
- no secret profits
- no commingling funds
Duty to communicate
Express contractual duties
Agent is personally liable for 3rd party contracts only if
agents act with no authority
principal’s identity unrevealed
principal’s existence and identity undisclosed
all parties intend so
Principal is liable for agent contracts if
- actual express authority
- actual implied authority
- apparent authority
- ratification
principal liability for agent torts
- normal tort: liable if within the scope of employment/relationship. Except frolic, but detour okay.
- independent contractor: not liable (no control of methods) except for - 1) extremely dangerous activities; 2) nondelegable duties; 3) negligent hiring; 4) estoppel (hold out as agent)
- intentional torts: not liable except 1) specifically authorized; 2) natural result; 3) motivated by desire to serve.
Partnership formation
- no formalities required
- intent to be co-owners is required
- agency-like relationship
