Corporations

Question 1

Mandatory provisions in Articles of Incorporation

Answer 1

1) name and address of corp
2) name and address of each incorporator
3) name of registered agent and address of registered office
4) number of shares and attributes of each class

Question 2

Articles of Incorporation must be filed with

Answer 2

the department of state

Question 3

ultra vires

Answer 3

shareholders can seek injunction when officers and directors are acting beyond the corporations purpose

Question 4

bylaws are adopted by

Answer 4

the incorporators and directors

Question 5

bylaws are amended by

Answer 5

the directors or shareholders

Question 6

if there is a conflict between bylaws and articles

Answer 6

articles control

Question 7

de jure corp

Answer 7

formed upon substantial compliance with all incorporation requirements

Question 8

de facto corp

Answer 8

formed when there are good faith attempts to incorporate and there are acts on the corporation’s behalf

Question 9

corp by estoppel

Answer 9

a person who deals with a business as if it were a corp may be estopped from later arguing it is not a corp

Question 10

failure to file an annual report can result in

Answer 10

involuntary dissolution AND/OR
being barred from bringing an action in FL courts

Question 11

If a promoter enters into contracts before the corp is formed

Answer 11

the promoter is liable (unless there was a novation)
corp can be liable if they adopted the K

Question 12

pre- incorporation subscriptions cannot be revoked by subscribers

Answer 12

for 6 months without consent of all other subscribers

Question 13

pre-incorporation subscriptions may be

Answer 13

rejected by the corp after incorporation

Question 14

pre-incorporation subscriptions after acceptance are

Answer 14

enforceable by the corp

Question 15

director must be

Answer 15

18 y/o
natural person
one director is ok (for for profit corp)

Question 16

directors are removed by

Answer 16

shareholder majority vote
with or without cause

Question 17

special meetings of directors

Answer 17

require 2 days notice
no purpose need be stated

Question 18

regular meetings of directors

Answer 18

dont need notice (they are in the bylaws)

Question 19

quorum

Answer 19

the majority # of authorized directors needed for a meeting to be valid

Question 20

for directors to vote there must be

Answer 20

a majority of directors present to assent
directors CANNOT vote by proxy

Question 21

Board of directors fiduciary duties

Answer 21

duty of care
duty of loyalty

Question 22

immunity statute for board of directors

Answer 22

directors are NOT liable for damages for breaching duty of care or loyalty UNLESS they also
- violated a crim law
- received improper personal benefit
- authorized unlawful dividend
- engaged in reckless, willful, intentional misconduct

Question 23

officers are ___ of the corp

Answer 23

agents

Question 24

officers are selected, elected, and removed by

Answer 24

the board of directors

Question 25

president of a corp has

Answer 25

implied authority to do all acts necessary and proper in the usual course of business

Question 26

director or officer gets sued as part of their role in the corp they can seek

Answer 26

indemnification (reimbursement) unelss:
- held liable to the corp
- received improper personal benefit
- committed a crime

Question 27

mandatory indemnification if

Answer 27

fact finder ruled in favor of director/officer

all other situations are permissive

Question 28

shareholder liability

Answer 28

LIMITED LIABILITY! they are not personally liable for the debts of the corporation

Question 29

to pierce the corporate veil, FL requires

Answer 29

a showing of improper conduct

Question 30

shareholder special meetings

Answer 30

require 10 days notice and need to state purpose of the meeting

Question 31

shareholder regular meetings

Answer 31

require 10 days notice

Question 32

court ordered shareholder meeting

Answer 32

court can seek this if no annual meeting held within 15 month period

Question 33

proxies

Answer 33

shareholder can appoint proxies to have them vote on their behalf

Question 34

appointment of proxy:

Answer 34

• effective when a signed appointment form is received
• valid for the term provided for in the form (if no term, valid for 11 months)

Question 35

shareholders have a right to inspect records and can do so only if

Answer 35

demand is made in
- good faith
- for a particular purpose
- with reasonable particularity
- must give written notice of demand within at least 5 business days before they wish to inspect

Question 36

shareholder derivative suit requirements

Answer 36

• SH owned stock when claim arise
• SH owns stock when suit commences
• SH made demand to the board

Question 37

if no demand is made for shareholder derivative action or suit is brought before 90 days ends, shareholder must prove

Answer 37

delay will cause irreperable harm

Question 38

voluntary dissolution

Answer 38

approved by the board and absolute majority of shareholders OR written consent of absolute majority of shareholders

Question 39

involuntary dissolution

Answer 39

directors are deadlocked
shareholders are deadlocked
waste of corp assets
director fraud or illegal conduct

Question 40

not-for profit corps must be

Answer 40

• for the public benefit
• stated in the articles
• may not pay dividends
• minimum 3 directors needed

Question 41

florida blue sky law

Answer 41

close corporations usually do not have to register their sales if less than 35 people

Question 42

section 16(b) of 1934 acct

Answer 42

short-wing profit rule: insiders must forfeit any trading profit they earned from a combined purchase and sale that occurs within a 6-month period

Question 43

rule 10b-5

Answer 43

stock purchaser may sue stock seller for failing to disclose material inside information

Question 44

insider trading and securities fraud enforcement act

Answer 44

SEC may sue stockholder if he illegally traded his stock based on insider information

Question 45

williams act

Answer 45

anti-fraud provision prohibiting false/misleading statements in connection with a tender offer by either the offeror, target, or any other person