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FBE > Corps > Flashcards

Corps Flashcards

1
Q

Pre-Incorporation Liability

A

Promoters - personally liable, Corps - Not liable for pre-incorp tansactions. (except with novation)

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2
Q

Articles of Incorporation (AoI)

A

(i).Name; (ii) address of principal office; (iii) shares; (iv) name and address of registered agent; (v) name and address of each incorporator.

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3
Q

Naming conventions (Can’t be)

A

(i) indicate unauthorized purpose; (ii) can’t contain governmental-esque names; (iii) can’t be indistinguishable from other names (no suffixes or stupid characters).

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4
Q

Articles MAY include

A

Purpose/ Broad statement of; corporate powers.

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5
Q

How many directors

A

At least one.

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6
Q

AoI are prohibited from having provisions:

A

That impose liability on shareholders for attorneys fees in connection with internal claims.

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7
Q

List of Reasons for Internal claims:

A

(i) violation of duty; (ii) derivative action; (iii) actions via breaking internal/state laws; (iv) internal affairs doctrine.

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8
Q

Florida does not issue

A

Certificate of Incorporation

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9
Q

Incorporation Timing (dates)

A

Effective on date accepted. Or (i) five days or less prior to filing date; (ii) 90 days or less after filing date.

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10
Q

Time to fix failed filing

A

60 days. State returns failure within 15 days

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11
Q

Ultra Vires

A

Any action beyond the scope of the stated purpose.

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12
Q

Ultra Vires Challenges (How its done)

A

(i) Shareholder files suit to enjoin; (ii) Corp can take action against director/officer/employee; (iii) State can enjoin

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13
Q

Stock Subscriptions

A

(i) Irrevocable for pre-incorp for six months from date BUT can be revoked if all subscribers agree; (ii) has to be in writing; (iii) Non-payment can be enforced if given wwritten notice and more than 20 days lapses.

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14
Q

Pre-emptive Rights

A

None unless stated in articles.

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15
Q

Distributions only authorized by

A

Board of Directors (Shareholders can’t compel but court can order it)

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16
Q

Insolvency Tests

A

Equity: Must be able to pay debts. Balance-Sheet: Corps total assets must exceed total liabilities

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17
Q

Solvency Docs

A

(i) financial statements from accounting practices; (ii) fair valuation (reasonable).

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18
Q

Liability for Unlawful Distros

A

Directors are personally liable to corps. Can force directors to pay other directors or shareholders to pay pro rata of overage.

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19
Q

Shareholder Meetings

A

Annual - Time, Date, Place (any business is fine). Special - Only described business

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20
Q

Meeting Notice

A

No fewer than 10 days, no more than 60 days. | Special meetings require purpose. | Merger meetings require this purpose stated.

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21
Q

Voting Types:

A

Cumulative - Number of Shares x Vacancies - So, Dude owns 30 shares and Co has 3 vacancies. Dude gets 90 votes total to split. |

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22
Q

Proxy Voting

A

Valid for 11 months unless otherwise specified

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23
Q

Shareholder Inspection Without Restriction

A

(i). AoI; (ii) most recent annual; (iii) all written comms with shareholders for last three years; (iv) names/addresses current directors/officers; (v) minutes; (vi) records of actions taken without shareholder meeting.

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24
Q

Shareholder Inspection needing a Proper Purpose

A

(i). Corporate Books/Records; (ii) records taken without board member meeting; (iii). financial statements/accounting records; (iv). current shareholder record.

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25
Q

Notice of Inspection Timing - Corps

A

Shareholder needs to give at least 5 days prior.

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26
Q

Disclosure of Financial Statement

A

Must disclose to shareholder upon written request unless publicly shown.

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27
Q

Whats required to pursue Derivative Action?

A

(i) action is commenced; (ii) possession of stock through purchase or transfer.

28
Q

Demand upon Board (Derivative Action) & Exceptions

A

Demand needs to be made first, then wait 90 days. (i) refuse; (ii) reject; (iii) ignore; (iv) irrep. injury; (v) futility.

29
Q

Demand Syntax Requirements for Derivative Action

A

Verified and stated with particularity whether plaintiff made a demand, waited 90 days, or why they didn’t

30
Q

Derivative Action Proceeding Stay

A

Inquiry will auto-stay.

31
Q

Derivative Action Dismissal

A

Majority vote by independent directors; (ii) majority vote of committee consisting of two+ appointed directors; (iii) panel of 1+ appointed persons.

32
Q

Piercing Corporate Veil Definition:

A

Goes after shareholders personally. - No Brightline on how to do this. Can include fraud, siphoning, unreasonable shit, etc.

33
Q

Resignation of Director

A

Fine. Written notice to board, chair, sec.

34
Q

Removal of Director by Shareholders

A

Anytime w/ or w/o cause. Has to be done at a meeting with that stated purpose. Can only removed by shareholder class who he was elected by.

35
Q

Removal of Director by Judicial Proc.

A

Fraud or Best Interest of Company (dude gets fucked by politics)

36
Q

Director Compensation

A

Fine. They can compensate themselves (of course they can…)

37
Q

Director Regular Meeting Rules

A

Can be held without notice of time, date, place, or purpose unless stated otherwise in AoI/Bylaws.

38
Q

Director Special Meeting Rules

A

At least two days notice of D/T/P, but no needed purpose. AoI/Bylaws can state otherwise.

39
Q

Quorum

A

Based upon original amount of directors (majority needed)

40
Q

Directors Voting Presence

A

Have to be there, unlike shareholders.

41
Q

Director Duties

A

Duty of Care & Duty of Loyalty.

42
Q

Self-Dealing/CoI

A

Breaches Duty of Loyalty.

43
Q

How many Officers needed?

A

No Florida specifics. Bylaws do it. Appointed by directors but no contract rights afforded.

44
Q

Merger Notice

A

ALL shareholders (regardless of ability to vote) must be given notice.

45
Q

Is Approval Needed by Shareholders for sale/transfer.

A

No, (NOT THE SAME AS MERGER!)

46
Q

Right of Appraisal

A

Granted when objection to corporate actions. Can force corp to buy shares at fair value.

47
Q

Creditor Dissolution

A

Judgement, isn’t paying, insolvent/ Corporation admits its insolvent.

48
Q

When Shareholders Can Dissolve

A

(i) Deadlocked + Irreparable Injury, business can’t be conducted; (ii) Shareholders deadlocked in voting for directors; (iii) Misapplied/wasted assets; (iv) Directors do illegal/oppressive/fraudulent nonsense; (v) corporation abandons business

49
Q

Non-profs AOI

A

(i) Corporate name; (ii) principal office address; (iii) purpose; (iv) director electing method; (v) limits of corporate powers; (vi) registered agent address and written acceptance; (vii) name/address of incorporators.

50
Q

Non-Profit Name

A

MUST contain Corp. or Inc.

51
Q

Non-prof Shares

A

Can’t do it/ No distros/ No loans unless both non-profs

52
Q

Non-Prof Number of Directors

A

3

53
Q

Dissolution Plans

A

Has to adopt a plan for distro of assets. (Debts first, then others - Enumerated)

54
Q

LLC Membership

A

Must have one member upon formation —- Can become a member through initial creation, merger, consent, owner transfer after 90 days of no members.

55
Q

LLC Profit/Loss Allocation

A

According to each members contributions. (percentages)

56
Q

Voting Rights Member Managed LLC

A

Each member has right to vote. Proportionate to current percentage.

57
Q

Voting Rights Manager Managed LLC

A

Each manager has equal rights.

58
Q

Member Managed LLC Liability

A

If member acts on own accord for unrelated things doesn’t make the LLC liable unless act was authorized.

59
Q

LLC Statement of Authority

A

Can limit or itemize member authority

60
Q

LLC members generally not _______ liable

A

personally

61
Q

Operating Agreement Duties

A

Loyalty/Care. Operating agreement CANNOT eliminate obligation of good faith/fair dealing

62
Q

Inspection Rights LLC

A

10 days to respond to demand

63
Q

Rights of Judgment Creditors for LLC

A

Single member LLC - Creditor can foreclose and gain membership to exclusion of debtor. | Multi-member - Charging order only to get member’s distros.

64
Q

Dissociation by Members

A

Can do it at anytime; may be liable to members and LLC though.

65
Q

Voluntary Dissolution Will occur when

A

Member consent, event/circumstances trigger, 90 days with no members (Can save with new member)

FBE (13 decks)

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