CORPORATIONS Flashcards
A corporation
What type of business entity takes on an independent existence as its own legal entity separate and distinct from its incorporators?
A corporations certificate of formation
What serves as the basic charter of a corporation?
This information is required to form it: 1) Name; 2) Duration; 3) Purpose; 4) Authorized Shares; 5) Classes of Shares; 6) Series of a Class; 7) Preemptive Rights; 8) Close Corporation; 9) Internal Affairs; 10) Registered Office and Agent; 11) Board Members; 12) Incorporators
What information must a certificate of formation set forth?
Examples of operations that a corporation will not operate as: an insurance company, a trust company, a bank, a savings association, an abstract or title company, etc
** What are some operations that a corporation may not engage in?
The name cannot include a word or phrase that implies or indicates that the entity is conducting a business that it is not authorized by law to pursue.
** What is the proper name for a corporation?
It begins upon the issuance of the certificate of incorporation or the certificate of formation.
*** When does a corporation’s legal existence begin?
After the certificate of incorporation is issued or certificate of formation takes effect, this meeting must be held by the initial board of directors or the incorporators, in order to adopt bylaws, elect officers, and transact business.
** What is an organizational meeting?
When an act of a corporation, or transfer (i.e. conveyance) of real or personal property to or by a corporation is beyond the scope or purposes of the corporation as expressed in the certificate of formation, this can be asserted in a shareholder’s proceeding against the corporation to enjoin the act or the transfer of property to or by the corporation
*** What is an Ultra Vires Act?
A business entity that offers the advantage of limited liability (like corporations) while at the same time offering partnership-like taxation benefits, in which profits are “passed” through to the owners of the LLC and taxed on personal income tax returns.
** What is an LLC?
As a general matter, an LLC provides legal and financial liability protections to its members if their business conduct is not irresponsible, unethical, or illegal.
*** What is the general liability of LLC and Members, Respectively?
A creditor is a creditor that was awarded damages in a judicial proceeding against another party.
** What is a judgment creditor?
Duties owed to shareholders: 1) Duty of Care; 2) Duty of Loyalty; 3) Majority Shareholder; 4) Members and Manager (LLC)
*** What fiduciary duties do directors, officers, and employees of a corporation owe its shareholders?
Shareholder approval is required for the corporation to sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property or assess other than in the usual course of business.
When is shareholder approval required for sale of assets?
