Corporations Flashcards
Mandatory provisions in Articles of Incorporation
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
Articles of Incorporation must be filed with
the department of state
ultra vires
shareholders can seek injunction when officers and directors are acting beyond the corporations purpose
bylaws are adopted by
the incorporators and directors
bylaws are amended by
the directors or shareholders
if there is a conflict between bylaws and articles
articles control
de jure corp
formed upon substantial compliance with all incorporation requirements
de facto corp
formed when there are good faith attempts to incorporate and there are acts on the corporation’s behalf
corp by estoppel
a person who deals with a business as if it were a corp may be estopped from later arguing it is not a corp
failure to file an annual report can result in
involuntary dissolution AND/OR
being barred from bringing an action in FL courts
If a promoter enters into contracts before the corp is formed
the promoter is liable (unless there was a novation)
corp can be liable if they adopted the K
pre- incorporation subscriptions cannot be revoked by subscribers
for 6 months without consent of all other subscribers
pre-incorporation subscriptions may be
rejected by the corp after incorporation
pre-incorporation subscriptions after acceptance are
enforceable by the corp
director must be
18 y/o
natural person
one director is ok (for for profit corp)
directors are removed by
shareholder majority vote
with or without cause
special meetings of directors
require 2 days notice
no purpose need be stated
regular meetings of directors
dont need notice (they are in the bylaws)
quorum
the majority # of authorized directors needed for a meeting to be valid
for directors to vote there must be
a majority of directors present to assent
directors CANNOT vote by proxy
Board of directors fiduciary duties
duty of care
duty of loyalty
immunity statute for board of directors
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
officers are ___ of the corp
agents
officers are selected, elected, and removed by
the board of directors
president of a corp has
implied authority to do all acts necessary and proper in the usual course of business
director or officer gets sued as part of their role in the corp they can seek
indemnification (reimbursement) unelss:
- held liable to the corp
- received improper personal benefit
- committed a crime
mandatory indemnification if
fact finder ruled in favor of director/officer
all other situations are permissive
shareholder liability
LIMITED LIABILITY! they are not personally liable for the debts of the corporation
to pierce the corporate veil, FL requires
a showing of improper conduct
shareholder special meetings
require 10 days notice and need to state purpose of the meeting
shareholder regular meetings
require 10 days notice
court ordered shareholder meeting
court can seek this if no annual meeting held within 15 month period
proxies
shareholder can appoint proxies to have them vote on their behalf
appointment of proxy:
- effective when a signed appointment form is received
- valid for the term provided for in the form (if no term, valid for 11 months)
shareholders have a right to inspect records and can do so only if
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
shareholder derivative suit requirements
- SH owned stock when claim arise
- SH owns stock when suit commences
- SH made demand to the board
if no demand is made for shareholder derivative action or suit is brought before 90 days ends, shareholder must prove
delay will cause irreperable harm
voluntary dissolution
approved by the board and absolute majority of shareholders OR written consent of absolute majority of shareholders
involuntary dissolution
directors are deadlocked
shareholders are deadlocked
waste of corp assets
director fraud or illegal conduct
not-for profit corps must be
- for the public benefit
- stated in the articles
- may not pay dividends
- minimum 3 directors needed
florida blue sky law
close corporations usually do not have to register their sales if less than 35 people
section 16(b) of 1934 acct
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
rule 10b-5
stock purchaser may sue stock seller for failing to disclose material inside information
insider trading and securities fraud enforcement act
SEC may sue stockholder if he illegally traded his stock based on insider information
williams act
anti-fraud provision prohibiting false/misleading statements in connection with a tender offer by either the offeror, target, or any other person
