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Florida 2021 Feb Bar > Florida Corporations (2021) > Flashcards

Florida Corporations (2021) Flashcards

1
Q

Formation of Organization

A

Incorporator delivers articles of incorporation to the Department of State for filing

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2
Q

Articles of Incorporation

A

basic charter of the corporation

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3
Q

Required Provisions of Articles of Incorporation

A 
Name
Corporations Adress
Authorized Shares
Resident Agent
Incorporators
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4
Q

Optional Provisions

A 
Board Members
Purpose
Management
Powers
Par Value
Shareholders
Exclusive Forum Provisions
Preemptive Rights
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5
Q

Requirements for Corporation Name

A

Must include term which identifies it as a corporation;
Must not appear to be connected to gov’t;
Must be distinguishable from filed names (except fictitious names)

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6
Q

Requirements for Authorized Shares

A

Articles must include number of shares the corporation is authorized to issue

MUST authorize: one of more classes of shares with unlimited voting rights, and one of more classes of shares which receive net assets at dissolution. (can be the same class/share)

More than one class or series of stock may be authorized unless the articles require the board of directors to determine by resolution

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7
Q

When Corporation Begins

A

Date of filing OR date specified in articles

*If filed 5 days after specified date then goes by date filed

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8
Q

When Corporation Ends

A

Unless articles specifically specify terms then presumed to exists perpetually

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9
Q

Corporate Purpose

A

Corporation can be created for any lawful purpose BUT can be limited by article

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10
Q

Ultra Vires

A

Corporation cannot be challenged on grounds that it lacks/lacked power to act

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11
Q

Corporation (Definition)

A

for-profit corporation, other than a foreign corporation incorporated under FL law

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12
Q

Foreign Corporation (Definition)

A

for-profit corporation incorporated under laws other than FL

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13
Q

Foreign Corporation Transacting W/O Authority Consequences

A

Cannot maintain proceeding until certificate obtained
Liable to FL for fees up to $1000
Does not impair validity of contracts, deeds, mortgages, security interests, or corporate acts
Does not prevent from defending action in FL

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14
Q

Bylaws

A

Written rules for conduct of corporation

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15
Q

Who Adopts Bylaws

A

Incorporators or board of directors unless reserved to shareholders

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16
Q

Provision Inconsistent with Law

A

Permissible

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17
Q

De Facto Corporation

A

Company that operates as if it were a corporation even though it hasn’t completed steps to incorporate.

Temporarily treated as valid

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18
Q

Corporation by Estoppel

A

Prevents a corporation/defendant from using corporation’s failure to legally incorporate as a defense in a lawsuit

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19
Q

Promoter

A

The party who assists in planning/forming new business

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20
Q

Promotor Contract Liability

A

Liable on any contract made prior to the creation of the incorporation unless there is a novation

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21
Q

Subscription for Shares

A

Offer to purchase shares made to corporation by a person who wants to be shareholder.

Valid for 6 months unless agreed otherwise

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22
Q

Adequate Capital

A

Meets both company’s future needs and the ability to pay its debts when they are due

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23
Q

Piercing Corporate Veil

A

Plaintiff must show corporation is mere instrumentality/alter ego of the defendant and the defendant is engaged in improper conduct - makes all shareholders liable

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24
Q

When is Parent Corp liable for Subsidiary

A

Need 2 out of 3:

Formalities of separate corp. procedures are not observed
Corp is inadequately financed as separate unit
Policies of corp are not directed to own interests

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25
When is shareholder personally liable
If they personally commit a tort while acting as an agent for corporation
26
Common Stock
Elect board of directors & vote on corporate structure Lowest Priority
27
Preferred Stock
Entitled to receive payment of dividends before other shares OR entitled to receive distribution of preferential amount in event of liquidation/dissolution Must be paid before common stock
28
Outstanding Shares
number of shares currently owned by investors - does not include shares corporation has repurchased
29
Voting Rights
Each outstanding share has voting rights unless they are redeemed
30
Treasury Stock
Shares that company issued and company reacquired
31
Shares within Class of Stock
Must have identical rights and preferences unless the shares are divided into separate series
32
When Corporation Cannot Make Distribution
Cannot make distribution if after the corporation would not be able to pay debts OR the total assets would be less than total liabilities + amount needed to cover preferential rights
33
Watered Stock
Gratuitously issued by agreement for less than par value
34
Redemptions
Must be provided for in the articles of incorporation and only applies to preferred stock
35
Repurchases
Corporation can buy back shares of stock as long as they are not insolvent and it would not impair preferred stock holder rights
36
Annual Meetings
Must hold annual meeting of shareholders to elect directors and transact proper business
37
Special Meetings
Must hold special meeting either: On call of board of directors OR person authorized by articles of incorporation and/or bylaws If the holders of at least 10 percent of all votes deliver written demand to secretary
38
Notice of Meeting
Corporation must only provide shareholders entitled to vote with notice of the date time and place of meeting 10-60 days before meeting date *Notice only needs to describe purpose if special meeting
39
Quorum
Majority of the shares that may be cast on a vote is quorum unless articles provide otherwise
40
Limits on Quorum
Cannot consist of less than 1/3 shares entitled to vote
41
Direct Voting
FL Rule* - one share one vote, can use shares entitled to vote however they want
42
Cumulative Voting
Can be provided for in articles - number of shares entitled to vote x number of seats = number of votes, must use total number of votes
43
Proxy Votes
When a person authorizes another person to vote shares for them
44
Voting Trusts
Agreement (must be signed in writing) among one or more shareholders to vote certain way
45
Voting Agreements
Agreement (can be oral) between two or more shareholders providing how shareholders will vote
46
Shareholder Inspection of Records
General Corp Records - may inspected during regular business hours at corporations principal office with 5 day demand Other Corp Records - may inspect and copy if in good faith and proper purpose, describes with reasonable particularity their purpose, records are directly connected with purpose
47
Board of Directors
Required in every corporation: All members must be 18+ Do NOT need to be FL residents/shareholders Articles can impose other requirements
48
Election of Board of Directors
Elected at first annual shareholder's meeting and each subsequent annual meeting
49
Authority of Board of Directors
Make bylaws Fill vacancies Set compensation Make loans
50
Removal of Directors
Shareholders can remove any director with or without cause unless provided otherwise in articles of incorporation
51
Resignation of Directors
Director can resign at anytime by delivering written notice
52
Officers
Must have president, secretary, and treasurer (can be the same person) and is appointed by the board of directors
53
Duty of Care (general)
Owed by directors and officers - duty to take reasonable steps to monitor corporations management and act carefully when acting on behalf of corporation
54
Duty of Good Faith
Corporation's directors and officers conduct obligations in good faith and in a manner they reasonably believe to be in best interesr
55
Business Judgement Rule
Protects officers and directors of corporation from personal liability as long as they act in good faith, with due care, and within their authority
56
Duty of Loyalty
Duty to avoid implicating personal interests *Is there conflict of interest & is it fair to the corporation?
57
Merger
When one or more existing corporations are absorbed into another corporation
58
Consolidation
When two existing corporations merge into one new corporation
59
Voluntary Dissolution
Majority of Incorporators/Directors OR Majority of Board and Shareholders can authorize dissolution
60
Involuntary Dissolution
Circuit court can dissolve a corporation in certain proceedings by a corporate shareholder
61
SEC 10(b)5
Person is liable for the (1) intentional use of (2) any means of interstate commerce, (3) to defraud or make material omissions/misrepresentation
62
Derivative Claims
When harm is done to a corporation a shareholder can bring a derivative action on behalf of the corporation with recovery going to the corporation
63
Direct Claims
Wrongful act that deprives a shareholder of a right to which his shares entitle him or which is personal to a shareholder is a direct claim
64
Change to Quorum or Voting
Amendment which changes quorum or voting must meet the same quorum/voting requirement then in effect or proposed - whichever is greater

Florida 2021 Feb Bar (1 decks)

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