MO Corps: Mini Review

Question 1

Formation

Answer 1

Promoters are liable until novation and fiduciaries
Subscribers are irrevocable for 6 months
Articles equal APAIN (authorized shares, purpose, agent, incorporators, name)
LL unless you pierce veil.

Question 2

Issuance

Answer 2

Par value - minimum issuance price

Preemptive rights - maintain ownership %

Question 3

Director/Officer Liablity

Answer 3

1. Duty to Manage
2. BJR
3. Fiduciaries –> care (prudence unless articles limit) + loyalty (no unfair benefits unless disclosure + independent ratification)

Question 4

Shareholder Rights:

Answer 4

1. Derivative Suits: contemporaneous ownership + Adequacy+ Demand
2. Voting: Only record Date Owner Votes
3. Proxies: revocable unless labeled + coupled with interest
4. Quorum: Majority of all shares
5. Vote: votes cast in favor exceed votes cast against
6. Cumulative Voting = Shares times Slots
7. Dividends: Discretionary unless insolvency; common = pay last; preferred = pay first; participation = pay twice; cumulative = add up

Question 5

Alternative Business Organizations: Eliminating Formalities (closely held)

Answer 5

Unanimous election + Share transfer restriction = no piercing + possible s-corp status

Question 6

Alternative Business Organizations: PC

Answer 6

just one profession + LL

Question 7

Alternative Business Organizations: LLC

Answer 7

LL + L life+ L Liquidity + L Tax

Question 8

Fundamental Changes

Answer 8

1. Board resolves
2. Special Notice
3. Majority of All shares
4. Dissenters’ rights
5. Notice to State.

Question 9

Federal Securities laws: Sec 10(b)

Answer 9

Scienter + Disception + Actual purchase or sale

Question 10

Federal SEC Laws: Sec 16(b)

Answer 10

No trading profits within 6months

Question 11

Federal SEC Laws: SOA

Answer 11

NO knowingly false filings + No benefits during your falsehoods or black out periods.