Corporations

Question 1

Formation

Answer 1

filing Articles of Incorporation with the state, which detail basic information like the company name, address,

incorporators, and purpose of the business,

along with appointing a registered agent and

adopting bylaws to govern internal operations

Question 2

Duty of Care

Answer 2

duty of care owed when they act for or on behalf of the corporation

Question 3

Business Judgement Rule

Answer 3

When making a decision for the corporation, there is a presumption that a director’s conduct acted in good faith, on an informed bases, and in the best interest of the company.

BJ rule doesnt apply to duty of loyalty

Question 4

Duty of Loyalty

Answer 4

Duty is breached when:

1) director is on both sides of an adverse action
2) director usurps an opportunity
3) compete with the corporation

BJ rule doesnt apply to duty of loyalty

Question 5

Defenses to Duty of Loyalty

Answer 5

1. Conduct was approved by disinterested directors
2. Conduct was approved by disinterested shareholders
3. transaction was fair to the corporation

Question 6

Piercing the Corporate Veil

Answer 6

Generally, a corporation is separate from liability from the personal assets of the shareholders.

BUT in some cases, they can:

1. corporation doesnt have any assetts to pay if they are sued
2. Corporation is an alter ego of the shareholders
3. Corporation used to commit fraud

Question 7

Officers

Answer 7

Run day to day business, and generally have authority to bind the corporation.