Corporations 8 Flashcards
Each ________ must have a ______ ___ _____. MBCA § 8.01(a).
corporation
board of directors
In ______ ____ ______, the shareholders may do away with the board. MBCA § 7.32
closely held corporations
In closely held corporations, the _________ may do away with the ______. MBCA § 7.32.
shareholders
board
__________ take action at meetings of the Board of Directors. MBCA §8.20.
Directors
Where do directors take action?
meetings of the board of directors
Are directors agents of the corporation?
NO
Do agents have the ability to bind the corporation?
no, the board has that ability, but the individual board members do not.
All _______ ______ shall be exercised by or under the authority of the board of directors, and the business and affairs of the corporation shall be managed by or under the directors, and subject to the oversight, of the board of directors. MBCA § 8.01(b).
corporate powers
All corporate powers shall be exercised by or under the authority of the __________________, and the business and affairs of the corporation shall be managed by or under the __________, and subject to the oversight, of the _____________. MBCA § 8.01(b).
board of directors
directors
board of directors
What specifics the number of directors?
MBCA § 8.03(a)
The Articles of Incorporation or the bylaws
Directors are ________ at the annual meeting of the shareholders. MBCA § 8.03(b).
elected
The _______ of all _______ expire at the next annual shareholders’ meeting following their election. MBCA § 8.05(b).
terms
directors
The terms of all directors ________ at the next annual shareholders’ meeting following their election. MBCA § 8.05(b).
expire
The terms of all directors expire at the _____ _______ _________ _________ following their election. MBCA § 8.05(b).
next annual shareholders meeting
The terms of all directors expire at the next annual shareholders meeting _______ ______ _____. MBCA § 8.05(b).
following their election
How long are directors, directors under the MBCA?
directors are directors until the next annual meeting
Any _______ may ______ at any time. MBCA § 8.07(a).
director
resign
The ________ may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. MBCA § 8.08(a).
shareholders
The shareholders may remove one or more _________ with or without cause unless the _______ ____ _______ provide that directors may be removed only for cause. MBCA § 8.08(a).
directors
articles of incorporation
The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be _______ _____ ___ ______. MBCA § 8.08(a).
removed only for cause
Unless the _______ ___ _______ provide otherwise the shareholders may fill the vacancy, or the board of directors may fill the vacancy. MBCA § 8.10.
articles of incorporation
Unless the articles of incorporation provide otherwise the _________ may fill the vacancy, or the board of directors may fill the vacancy. MBCA § 8.10.
shareholders
Unless the articles of incorporation provide otherwise the ________ may fill the vacancy, or the ______ __ ______ may fill the vacancy. MBCA § 8.10.
shareholders
board of directors
The ________ ___ _______ may provide for staggering the terms of the directors by dividing the total number of directors into two or three groups. MBCA § 8.06.
articles of incorporation
The articles of incorporation may provide for staggering the terms of the ________ by dividing the total number of directors into two or three groups. MBCA § 8.06.
directors
How do directors take action?
Directors take action through the use of meetings of the board of directors
Directors take action through the use of meetings of the board of directors. DGCL § 141(b); MBCA § 820. However, actions may be taken _________ ___ _______ if each director signs a consent describing the action to be taken. DGCL § 141(f); MBCA § 8.21(a).
without a meeting
Directors take action through the use of meetings of the board of directors. DGCL § 141(b); MBCA § 820. However, actions may be taken without a meeting if _____ _______ _____ ___ _______ describing the action to be taken. DGCL § 141(f); MBCA § 8.21(a).
each director signs a consent
Directors take action through the use of meetings of the board of directors. DGCL § 141(b); MBCA § 820. However, actions may be taken without a meeting if each director signs a consent _________ _____ ______ ___ ____ ______. DGCL § 141(f); MBCA § 8.21(a).
describing the action to be taken
Directors take action through the use of meetings of the board of directors. DGCL § 141(b); MBCA § 820. However, actions may be taken without a meeting if each director signs a consent describing the action to be taken. DGCL § 141(f); MBCA § 8.21(a). Must be ___________ and if any director objects to the action, the board will have to call a meeting to approve the action.
unanimous
Directors take action through the use of meetings of the board of directors. DGCL § 141(b); MBCA § 820. However, actions may be taken without a meeting if each director signs a consent describing the action to be taken. DGCL § 141(f); MBCA § 8.21(a). Must be unanimous and if ______ ______ _______ to the _______, the board will have to call a meeting to approve the action.
any director
objects
action
Directors take action through the use of meetings of the board of directors. DGCL § 141(b); MBCA § 820. However, actions may be taken without a meeting if each director signs a consent describing the action to be taken. DGCL § 141(f); MBCA § 8.21(a). Must be unanimous and if any director objects
What happens?
If any director objects to the action the board will have to call a meeting to approve the action
A _________ of the total number of directors shall constitute a quorum for the transaction of business unless the certificate of incorporation or the bylaws require a greater number. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless he certificate of incorporation, or the bylaws shall require a vote of a greater number. DGCL § 141(b).
o Look to the charter and bylaws!
majority
A majority of the ______ ______ _____ ______ shall constitute a quorum for the transaction of business unless the certificate of incorporation or the bylaws require a greater number. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless he certificate of incorporation, or the bylaws shall require a vote of a greater number. DGCL § 141(b).
o Look to the charter and bylaws!
total number of directors
A majority of the total number of directors shall constitute a _______ for the transaction of business unless the certificate of incorporation or the bylaws require a greater number. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless he certificate of incorporation, or the bylaws shall require a vote of a greater number. DGCL § 141(b).
o Look to the charter and bylaws!
quorum
A majority of the total number of directors shall constitute a quorum for the transaction of business unless the certificate of incorporation or the bylaws require a greater number.
The vote of the majority of the directors _______ ___ ____ ______ at which a quorum is present shall be the act of the board of directors unless he certificate of incorporation, or the bylaws shall require a vote of a greater number. DGCL § 141(b).
o Look to the charter and bylaws!
present at the meeting
_______ ________ may be held without notice of date, time, place, or purpose of the meeting. MBCA § 8.22(a).
regular meetings
Regular meetings may be held ______ _______ of date, time, place or purpose of the meeting. MBCA §8.22(a).
without notice
Regular meetings may be held without notice of ______, _______, _______, or ________ ____ ____ ____. MBCA §8.22(a).
date
time
place
purpose of the meeting
_______ _________ shall be preceded by at least two days’ notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting. MBCA § 8.22(b).
Special Meetings
Special Meetings ____ ____ __________ by at least two days’ notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting. MBCA § 8.22(b).
shall be preceded
Special proceedings shall be preceded by at least _____ ____ ______ of the date, time and place of the meeting. The notice need not describe the purpose of the special meeting. MBCA § 8.22(b).
two days notice
Special Meetings shall be preceded by at least two days notice of the _____, ______, and _______ of the meeting. The notice need not describe the _______ of the special meeting. MBCA § 8.22(b).
date
time
place
purpose
Can a director waive notice?
A director may waive notice. MBCA § 8.23(a).
A ______ may waive _______. MBCA § 8.23(a).
director
notice
_________ in a meeting is a waiver of notice. MBCA § 8.23(b).
participation
What is a waiver of notice?
MBCA § 8.23(b).
Participation in a meeting is a waiver of notice
Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Act to be taken by the board of directors may be taken without a meeting if each director _____ ___ _______ describing the action to be taken and delivers it to the corporation. A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document. MBCA § 8.21.
signs a consent
Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Act to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the _______ ___ ___ ______ and delivers it to the corporation. A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document. MBCA § 8.21.
action to be taken
Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Act to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and ______ ____ ____ __ _______. A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document. MBCA § 8.21.
delivers it to the corporation
Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Act to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation. A _______ signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document. MBCA § 8.21.
consent
Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Act to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation. A consent signed under this section has the effect of action taken at a _______ of the _____ ___ _____ and may be described as such in any document. MBCA § 8.21.
meeting
board of directors
Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Act to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation. A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in ______ _______. MBCA § 8.21.
any document
EXAM: On a hypo, very plausibly, you could see this as a MC or short answer that is asking who is going to be holding the initial meeting and you will need to know if the directors are named in the charter that is who is holding the meeting if they are not the incorporators are holding a meeting and they are electing the directors or you can have written consent for that. !!
!!
The Default Rule: A _______ of the total number of directors shall constitute a ________ for the transaction of business.
majority
quorum
The Default Rule:
A majority of the total number of directors shall constitute a quorum for the transaction of business. However, this may be changed to _______ or _____ in the charter or bylaws. DGCL § 141(b); MBCA § 8.24(a)
more or less
If a ________ is present at the vote, the vote is deemed to be an act of the board. DGCL § 141(b); MBCA § 8.24(b).
quorum
If a quorum is present at the vote, the vote is deemed to be an _____ ___ ___ ____. DGCL § 141(b); MBCA § 8.24(b).
act of the board
Corporate minutes of a meeting – keep track of decisions made and how many voted one way or another. !!
!!
CEO, COO, CFO – bottom level of the chart
Officers
The _________________ may elect officers permitted by the bylaws. DGCL § 142(a); MBCA § 8.40(a).
board of directors
The board of directors may ______ ______ permitted by the bylaws. DGCL § 142(a); MBCA § 8.40(a).
elect officers
Each ________ has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors. DGCL § 142(a); MBCA § 8.41.
officer
Each officer has the ________ and _____ _______ the ________ set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors. DGCL § 142(a); MBCA § 8.41.
authority
shall perform
functions
Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the _____ ___ _______. DGCL § 142(a); MBCA § 8. 41.
board of directors
An _______ may resign at any time. DGCL § 142(b); MBCA § 8.43(a).
officer
An officer may ______ at any time. DGCL § 142(b); MBCA § 8.43(a).
resign
The ______ may remove an officer with or without cause. DGCL § 142(b); MBCA § 8.43(b).
board
The board may remove an officer ______ ____ ___ _____. DGCL § 142(b); MBCA § 8.43(b).
with or without cause
Board may act through __________ composed exclusively of one or more directors to perform functions of the board of directors. DGCL § 141(c)(2); MBCA § 8.25(a).
committees
Board may act through committees composed exclusively of one or more directors to perform functions of the ____ ___ _____ DGCL § 141(c)(2); MBCA § 8.25(a).
board of directors
________ ____ _____:
*Authorize or approve distributions
*Authorize or approve acts requiring Shareholder approval
*Fill vacancies on the board or
*Adopt, amend, or repeal bylaws.
Committees May Not
Committees MAY NOT:
*?
*Authorize or approve acts requiring Shareholder approval
*Fill vacancies on the board or
*Adopt, amend, or repeal bylaws.
Authorize or approve distributions
Can a committee authorize or approve distributions?
NO
Committees MAY NOT:
*Authorize or approve distributions
*?
*Fill vacancies on the board or
*Adopt, amend, or repeal bylaws.
Authorize or approve acts requiring shareholder approval
Committees MAY NOT:
*Authorize or approve distributions
*Authorize or approve acts requiring Shareholder approval
- ?
*Adopt, amend, or repeal bylaws.
Fill vacancies on the board
Committees MAY NOT:
*Authorize or approve distributions
*Authorize or approve acts requiring Shareholder approval
*Fill vacancies on the board or
*?
Adopt, amend or repeal bylaws
Most public corporations have at least three committees:
1.
2.
3.
audit, nomination, and compensation.
