Corps Flashcards
Organizing A Corp
Paper, Person, Act Paper - AoC Person - Incorporator can be person or entity Act - file with SoS. If accept, corp formed.
Promoter and Liability of Corp for K prior to Incorp
Promoter lib unless novation or ASS not lib. Corp liable if adopt E or I. E = OA + KMF I = AB. KMF + P w/A + Con/Acq
Subscriptions
Written offer to buy stock from corp Preincorp - irrevocable for 6 months. Post-incorp - revocable until BoD accepts
Directors Role in Corp
Not As of corp. Must act together. Make big decisions, set BoD and Officer salaries. Appoint Os.
D&O Indemnification
Must - PoMoO May - GF + BIOCorp Cannot - DoL violation
Director Voting - for resolutions
Q + maj of Q. Can break.
Officer’s Role in Corp
As of corp. ActA if BoD gives, but BoD can’t give power they don’t have. AppA to bind in OrdC. ExtraOrdC BoD must authorize.
DoC
BJR = P BD V if act in Informed + gF + RPP + HB that BIOCorp. Can rely on others Burden on π.
Conflicted Interest Transaction
KAM. I am not conflicted in how I feel about KAM. ∆ has Knowledge Approves K Material Financial Benefit
Corp Opp
For the LIFE of me I can’t figure out when you won’t give this opp to the corp first Line of business Interest/Expectancy Found on co time/resources
Defenses to Liability for DoL
Fair @ time Majority of disinterested SHs or Directors approve.
AoC can eliminate personal liability for directors unless
IM not going to excuse you from a DUI Intentional Misconduct/Crime Distribution unlawfully approved Usurp corp opp Improper Personal Benefit
PCV
API + Interest of Justice Requires Pierce ABCCDEF Alter Ego Bad Faith use of corporate form Commingling of assets Created to perpetuate fraud Deception of creditors Enter corp undercapitalized Fail 2 Follow Formalities
Remedy for usurping corp opp?
Constructive Trust
SH Voting - who?
RO on RD unless 1) Proxy 2) Death. or Voting Agreement.
SH voting - electing directors
Plurality unless Cum Vote.
SH voting - remove director
Maj entitled
SH voting - fund corp change
Maj entitled
Voting by Proxy
11 REIndeer Went 2 SAW VET (reindeer are proxy for santa) 11 months presumed valid Revocable - unless expressly says no or Interest coupled w. Writing 2+, last in time wins Signed Appointment Form Verified Electronic Transmission
Result of Notice Defects
Actions voidable unless waive - E or I
2 ways to waive notice defects
E - Waive in signed writing I - SH comes to mtg, doesn’t object
Lawsuit by SH v Corp
SH file IF WOULD harm SHs or Corp. Illegal, Fraud, Wilful Oppression or Unfair, Lack of Decorum
Derivative Suit
SAD fo 90 days writing to corp about my grievances Standing - Adequately rep interests Demand on corp in writing unless futile, wait 90 days to sue. Remedy directly to corp Can be dismissed if not found to be in BIOCorp Settle only w/ court approve.
Actions Requiring SH Amendment
A DAMN SALAD Amend AoC Dissolution (voluntary) Asset Sale > 75% Merger Name change Surety Agent for SoP change Location of HQ change Abolishing or limiting director liability Director loans
SH inspection of books/records
For a proper purpose affecting rights as SH- make demand on corp. Must give 5 days notice. Can bring atty, accountant, or other with you.
SH Appriasal rights
PAM C Preemptive Rights Asset Sale Merge Cumulative Voting
Appraisal
In close corp (market out exception in publicly traded corp), if don’t agree w/ fund decision, demand corp to buy back your stocks. Process: ONO, What Delicate Skates! Corp must sue to determine FV Object No Vote in SH mtg. Written Demand to Corp Deposit Shares w/ Corp. If Corp doesn’t like can sue to determine FMV.
When can SH seek judicial dissolution?
Corporate waste, oppression in close corp, or SH failed @ consecutive mtgs to fill BoD vacancy. In close corp: court could order buyout of objective SH.
Process to Amend AoC
BoD proposes, pass resolution. BoD calls SH mtg, written notice 60-10 days before. SH Q, if Q, needs maj of shares outstanding. If approve, file amended AoC with SoS.
SH and Director Voting
