Corporations Part 1 Flashcards
_________ are now a fixture of contemporary American Life.
Corporations
Corporations Sources of Law _______ and _____-
DGCL
MBCA
________ is the most popular jurisdiction for incorporation (at least for now), but each state has laws providing for the incorporation and carrying on of business through the corporate form.
Delaware
Why do Corporations like ________?
Commitment to keep _________ _______ modern and up to date; _________ to corporate law proposed by the Delaware Bar Association.
Delaware
Corporation Statutes
Amendments
Why do Corporations like Delaware?
Commitment to keep Corporation Statutes up to date; amendments to corporate law proposed by the ______ _____ _____.
Delaware Bar Association
Why do Corporations like Delaware?
Certain level of _________ in ________ the corporation.
flexibility
structuring
Why do Corporations like Delaware?
Quality of Delaware ______ and _____.
courts and judges
Quality of Delaware courts and judges.
1. ?
2.
3.
4.
- Special court: Chancery Court
Quality of Delaware courts and judges.
1.
2. ?
3.
4.
- No juries; known to be efficient (speedy, even)
Quality of Delaware courts and judges.
1.
2.
3. ?
4.
Large body of case law
Quality of Delaware courts and judges.
1.
2.
3.
4. ?
- Certain level of technical expertise
Why do Corporations like Delaware?
Many states look to Delaware for ______.
guidance
Why do Corporations like Delaware?
_______ are familiar with Delaware.
Investors
Why do Corporations like Delaware?
Delaware can be ____ ______ to businesses.
tax-friendly
Why do Corporations like Delaware?
Delaware offers many options for businesses to _____ _____.
retain privacy
Why do Corporations like Delaware?
BUT incorporating in Delaware is often not justifiable for ____ _____.
small businesses
The ________ is presumed to exist in every state without any need to create a sister entity. BUT: some states have rules about foreign corporations doing business in the jurisdiction.
Corporation
Contract Terms: ______ ____ ______ v. _____ ___ ______.
Choice of Law
Choice of Venue
_____ ___ _____: Which jurisdiction’s law will apply to a dispute under the contract?
Choice of Law
Choice of Law: Which _________ _____ will apply to a dispute under the contract?
jurisdiction’s law
Choice of Law: Which jurisdiction’s law will apply to a ______ under the _______?
jurisdiction
contract
Contracts: _____ ____ _____, Generally Restatement Second ______ ____ _____§ 187
conflicts of law
conflicts of law
Contracts: choice of Law, Generally RSTMT (Second) Conflicts of Law § 187
(1) The _______ of the _______ _______ by the ________ to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by explicit provision in their agreement directed to that issue.
law
state
chosen
parties
Choice of Law: Which jurisdiction’s law will apply to a dispute under the contract?
Contracts: choice of Law, Generally RSTMT (Second) Conflicts of Law § 187
(1)The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by explicit provision in their agreement directed to that issue.
(2)The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either.
(a) The chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or
(b) Application of the law of the chosen state would be contrary to the fundamental policy of a state which has a materially greater interest than the chosen state in determination of the particular issue and which… Would be the state of the applicable law in the absence of an effective choice of law by the parties.
!!
!!
____ ___ _____: In what jurisdiction must an action be commenced?
Choice of Venue
Choice of Venue: _________________.
In what jurisdiction must an action be commenced?
Specify what states law you want to apply, otherwise you might be subject to this provision. What does this refer to?
Choice of law and Choice of Venue
____ __ _____ – governs contracts between corporations and other parties. Conflicts with external parties.
____ _____ ______ – internal workings.
Choice of Law
Internal Affairs Doctrine
The _____ ____ ______
* Predictability
* Uniform treatment of all shareholders
* Local favoritism
* Lower transaction cost
* Deter Litigation?
* Make litigation Harder?
Home Field Advantage
The Home Field Advantage
* ?
* Uniform treatment of all shareholders
* Local favoritism
* Lower transaction cost
* Deter Litigation?
* Make litigation Harder?
Predictability
The Home Field Advantage
* Predictability
* ?
* Local favoritism
* Lower transaction cost
* Deter Litigation?
* Make litigation Harder?
Uniform Treatment of all Shareholders
The Home Field Advantage
* Predictability
* Uniform treatment of all shareholders
* ?
* Lower transaction cost
* Deter Litigation?
* Make litigation Harder?
Local Favoritism
The Home Field Advantage
* Predictability
* Uniform treatment of all shareholders
* Local favoritism
* ?
* Deter Litigation?
* Make litigation Harder?
Lower Transaction Cost
The Home Field Advantage
* Predictability
* Uniform treatment of all shareholders
* Local favoritism
* Lower transaction cost
* ?
* Make litigation Harder?
Deter Litigation?
The Home Field Advantage
* Predictability
* Uniform treatment of all shareholders
* Local favoritism
* Lower transaction cost
* Deter Litigation?
* ?
Make Litigation Harder?
A _______ _________ is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes. See Dodge v. Ford Motor Co.
business corporation
We are not satisfied that the motives assigned to Wrigley and the other directors are contrary to the best interests of the corporation and the stockholders. For example, it appears to us that the effect on the surrounding neighborhood might well be considered by a director who was considering the patrons who would or would not attend the games if the park were in a poor neighborhood. Furthermore, the long run interest of the corporation in its property value at Wrigley Field might demand all efforts to keep the neighborhood from deteriorating. By these thoughts we do not mean to say that we have decided that the decision of the directors was a correct one. That is beyond our jurisdiction and ability. We are merely saying that the decision is one properly before directors and the motives alleged in the amended complaint showed no fraud, illegality or conflict of interest in their making of that decision. See Shlensky v. Wrigley = ____ _____ ____.
Business Judgement Rule
______ _________ – 2019 Statement on the Purpose of the Corporation
* Delivering value to customers
* Investing in employees
* Dealing fairly and ethically with suppliers
* Supporting the communities
* Generating long-term value for shareholders
Business Roundtable
________ _________. - group of folks that get together – similar to how they formulated the restatements it is advisory body of knowledgeable people who put together general guidance for corps.
Business Roundtable
The Life Cycle of the Corporation
* _____________
Getting investors/ funding, determine how corporation will be designed, investigating what states laws they want to incorporate under.
* Incorporation
* Organization
* Carrying on Business
(1) Annual Meeting
* Termination
Pre-Incorporation
The Life Cycle of the Corporation
* Pre-Incorporation
Getting investors/ funding, determine how corporation will be designed, investigating what states laws they want to incorporate under.
* _____________
* Organization
* Carrying on Business
(1) Annual Meeting
* Termination
Incorporation
The Life Cycle of the Corporation
* Pre-Incorporation
Getting investors/ funding, determine how corporation will be designed, investigating what states laws they want to incorporate under.
* Incorporation
* _________
* Carrying on Business
(1) Annual Meeting
* Termination
Organization
The Life Cycle of the Corporation
* Pre-Incorporation
Getting investors/ funding, determine how corporation will be designed, investigating what states laws they want to incorporate under.
* Incorporation
* Organization
* _____________
(1) Annual Meeting
* Termination
carrying on Business
The Life Cycle of the Corporation
* Pre-Incorporation
- Getting investors/ funding, determine how corporation will be designed, investigating what states laws they want to incorporate under.
* Incorporation
* Organization
* Carrying on Business
(1)___________
* Termination
Annual Meeting
The Life Cycle of the Corporation
* Pre-Incorporation
- Getting investors/ funding, determine how corporation will be designed, investigating what states laws they want to incorporate under.
* Incorporation
* Organization
* Carrying on Business
(1) Annual Meeting
* ___________
Termination
__________
* Who forms the corporation?
* How is the corporation formed?
* For what purpose is the corporation formed?
* Who is liable for obligations incurred before the corporation is formed?
Incorporation
Incorporation
* ?
* How is the corporation formed?
* For what purpose is the corporation formed?
* Who is liable for obligations incurred before the corporation is formed?
Who forms the corporation?
Incorporation
* Who forms the corporation?
* ?
* For what purpose is the corporation formed?
* Who is liable for obligations incurred before the corporation is formed?
How is the corporation formed?
Incorporation
* Who forms the corporation?
* How is the corporation formed?
* ?
* Who is liable for obligations incurred before the corporation is formed?
For what purpose is the corporation formed?
Incorporation
* Who forms the corporation?
* How is the corporation formed?
* For what purpose is the corporation formed?
* ?
Who is liable for obligations incurred before the corporation is formed?
