Corps Updates Flashcards
Director Indemnity
Must if successful, can if good faith/didn’t think conduct was bad.
S-Corp
Must be US Cit/RA; No more than 100 SH; No More than One Class of Stock
Good Faith Incorporation
Treated as defacto corp if parties screwed up paperwork as long as good faith effort.
Distributions
Capital Contributions Count toward total.
Stock Splits are NOT ____
Distributions; Can occur even if finances are fucked.
AoI Modification
Majority of QUORUM VOTE
Voting Agreements - Who can
Shareholders can, Directors CANNOT
Corp can have only _____ purpose
One
Promoter Personal Liability
Promoters personally liable for contracts and formation doesn’t protect.
Committees CANNOT
Cannot issue/sell/reacq shares unless board says so; fill vacancies on board or committees; do anything with bylaws
Controlling Shareholder Nonsense
Controlling can be less than 51% IF math equals out. Do all math here.
Committees & Auditors
Can select, oversee, and pay outside auditors.
Director Voting Proxy
No. Can’t do it
Merger Voting Req’s
Majority vote OF QUORUM
Disso Timing
120 days, wind up can take however long it needs
LLC - Articles Of ____
Organization
LLC Losses & Profits - Contributions
Contribute more, lose more.
New Share Types Rules
Each class gets independent vote and majority is needed FOR EACH.
No-Preemptive Rights in _____ Months
Can’t exercise within 6 months of incorp
PLLC Liability Nonsense
Being a shareholder doesn’t make them liable. Fucking up does.
Professional Corp Rules
Everyone has to be same profession
No duty of loyalty vio when:
Personal benefits disclosed, not illegal, at least two dirs vote yes who comprise majority of disinterested dirs.
Shares require EITHER
Voting rights, or right to get paid first. Don’t need both at same time.
Director Removal
ONLY shareholders can do it, Dirs can’t fuck over other ones.
Committee Number of Peeps
At least One and same is a board member, not major shit.
Director Special Meetings Don’t Need
to describe purpose
Special Committee Creation Numbers
TOTAL majority to create/dump/appoint
Special Rules for Merger (Getting around voting)
Corp survives merger, AoI unchanged, everyone holds same number of shares/rights
Corporate Directors Criminal Liability
CANNOT indemnify if director had “reasonable cause” to believe their conduct was unlawful. - Criminal Case likely to instakill indemnity
AoI Failure Timing
60 days
Member Managed LLC Voting
Percentage ownership equals voting power.
Quorum Voting Extra Jazz
Quorum needed for BOTH meeting AND voting. People can’t just pop smoke and leave to push a vote.
Asset Transfer
Same as merger rules for voting
OFFICER REMOVAL
Directors can do it unless bylaws say otherwise. Would remain liable for breach of contract.
Corps Advancing Litigation Costs
Needs a vote by disinterested parties
Outside Auditors CANNOT
be employed by the company
Delayed Distros
Distros are fine if initial test even if later solvency is fucked. This is dumb.
