NY BAR REVIEW BUSINESS RELATIONSHIPS LAW COURSE Flashcards
business relationships
business corporations.
limited liability companies.
partnerships.
formation of a corp under which law?
BCL business corporation law
BCL
requires filing of a certificate of incorporation w sec of state containing certain detailed info
what is the certain detailed info?
corporate name.
corporate purpose - to engage in any lawful activity.
county where office is to be located.
specific info about shares authorized to be issued.
duration of corp if other than perpetual.
designation of sec of stte as agent for service of process.
designation of registered agent.
name of bus corp generally MUST contain the word?
corporation.
incorporated.
limited.
some phrases and many words are NOT permitted in corporate names or are permitted only w what?
consent of particular stte agency
the word “insurance” may NOT be used without what?
approval of superintendent of financial services
the word “school” may NOT be used without what?
approval of commissioner of education
initial bylaws are adopted by incorporator where?
at organizational meeting
any bylaw adopted by incorporator is considered to be a bylaw adopted by whom?
shareholders
bylaws may contain what?
any provisions relating to business of corp.
conduct of its affairs.
rts and powers of corp.
rts and powers of shareholders.
adoption / amendment / repeal of bylaws requires what?
majority vote of shareholders.
if provided in cert of incorporation or bylaw adopted by shareholder, including any bylaw adopted by incorporators, by requisite vote of board of directors
BCL revision
substly revised effective 02/22/1998.
includes some provisions diff for corporations depending on whether were in existence on 02/22/1998 or formed afterwards.
every shareholder is entitled to ___ vote for every share standing in his name on record of shareholders
1.
unless otherwise provided in cert of incorporation.
any corporate action, other than election of directors, taken by vote of shareholders, generally requires what?
majority of votes cast at meeting of shareholders by holders of shares entitled to vote thereon.
unless otherwise provided by statute.
cert of incorp or bylaw adopted by shareholders.
statutory exceptions
approval of amendment to cert of incorporation and
authorization of shareholders’ petition for judicial dissolution require vote of MAJORITY of all outstanding shares entitled to vote thereon.
approval of a merger or consolidation / approval of any sale / lease / exchange / other disposition of all or substly all, of the assets of the corp, if NOT made in unusual / regular course of business actually conducted by corp.
authorization of non judicial dissolution requires what?
- corp incorporated after 02/22/1998, or whose certs of incorp expressly so provide, a majority of votes of all outstanding shares entitled to vote tehreon.
- for other corp in existence of 02/22/1998, 2/3 of votes of all outstanding shares entitled to vote thereon.
abstention shall NOT constitute what?
a vote cast.
except as otherwise provided in the cert of incorporation or bylaw adopted by shareholders
in place of voting at a meeting, any action by shareholders may be taken how?
w/o a meeting n written consent, setting forth the action so taken, signed by holders of all outstanding shares entitled to vote thereon or if cert of incorp so permits, signed by holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at meeting at which all shares entitled to vote thereon were present and voted.
holders of 50% or + of outstanding voting share of bus corp MAY seek dissolution of corp on which grounds?
directors are so divided respecting mgt of corp’s affairs that votes required for BOARD ACTION cannot be obtained.
shareholders are so divided that votes required for ELECTION OF DIRECTORS cannot be obtained.
there is INTERNAL DISENSSION and 2 or + factions of shareholders are so divided that dissolution would be BENEFICIAL to shareholders
minority shareholder’s rt to petition for judicial dissolution - holders of 20% or + of outstanding shares of bus corp, which is NOT a registered investment company and no shares of which are publicly traded, may seek dissolution of corp on which grounds?
directors have been guilty of illegal / fraudulent /oppressive actions toward complaining shareholders.
assets of corp are being looted / wasted / diverted for non corp purposes by its directors / officers or those in control.
ct in determining whether to involuntarily dissolve corp MUST consider what?
whether liquidation is the only feasible means for shareholder to obtain FAIR RETURN and whether liquidation is reasonably necessary for PROTECTION OF RTS of any substl number of shareholders
what are appraisal rts?
rt to dissent and be paid for shares.
rt to petition cts to receive payment of fair cash value of his shares.
statutory right of a corporation’s minority shareholders to have a judicial proceeding or independent valuator determine a fair stock price and oblige the acquiring corporation to repurchase shares at that price.
who gets appraisal rts?
any dissatisfied shareholder of bus corp who dissented from certain types of corp action, and minimum ownership interest is NOT required
what is the purpose of appraisal rts?
to allow a corp to proceed w an action it views as beneficial while protecting rts of dissenting shareholders
shareholder of domestic corp is entitled to appraisal rts if what?
he opposed a plan of merger or consolidation to which corp is a party, subject to certain enumerated exceptions, including where shareholder’s shares are PUBLICLY TRADED.
appraisal rts are available to shareholder who opposed what?
transfer or disposition of all or substly all of assets of a corp NOT in regular course of business (other than a transaction for cash in combination w dissolution of the selling company)
shareholder is entitled to appraisal rts if shareholder opposed amendment to certificate of incorporation that after the amendment was adopted, it what?
adversely affected any of shareholder’s rts , including preferential rts, redemption rts, preemptive rts, voting rts
shareholders claiming appraisal rts MUST follow what?
procedures and time limits in BCL
what are the procedures and time limits in BCL re appraisal rts?
prior to vote being taken on proposed corporate action, shareholder MUST file WRITTEN OBJECTION to the action, including DEMAND FOR PAYMENT of fair value of his shares if corporate action is taken.
upon consummation of corp action, corp MUST timely make WRITTEN OFFER to each shareholder who has filed NOTICE OF ELECTION TO DISSENT to pay for his shares at a specified price, which corp considers to be their fair value.
if corp fails to make TIMELY offer of payment, or if dissenting shareholder fails to AGREE w price specified in offer, corp may initiate SPECIAL PROCEEDING to FIX the fair value of their shares. if it fails to do so, shareholder may initiate the proceeding.
board of directors may consist of what?
1 / more members
in absence of controlling provision in by law or cert of incorp, which provide for cumulative voting - ex., directors are elected how?
plurality of votes cast at meeting of shareholders by holders of shares entitled to vote in election
directors may be removed how?
vote of shareholders for cause, and if cert of incorp or bylaws so provide, without cause
majority of entire board constitutes what?
quorum for transaction of business
cert of incorporation or bylaws may fix quorum at less than majority but not less than what?
1/3
cert of incorp may fix quorum at more than a majority for what?
transaction of all, or any specified item of business
board action requires what?
majority vote of directors present at time of vote provided a quorum is present
cert of incorp may provide greater proportion of votes shall be necessary for what?
transaction of all, or any specified item of business
unless otherwise restricted by cert of incorp or bylaws, directors may participate in meeting by means of conference phone / similar communications equipment allowing what?
all persons participating in meeting to hear each otehr at same time and such participation constitutes presence at meeting
unless otherwise restricted by cert of incorp / bylaws, action by board may be taken w/o meeting if all member of board do what?
consent in writing to adoption of resolution authorizing action
contract / transaction bw corp and 1 of its directors, or any other business entity in which director is also a director/officer or has substl financial interest, is NOT what?
void or voidable by reason alone of director’s interest / by reason alone that such director is present at meeting of board which approves such contract - interested director may be counted to establish quorum / that such director’s votes are counted for such purpose if-
material facts as to director’s interest in such contract / transaction and as to any such common directorship / officership / financial interest are disclosed in good faith / known to board, and board approves such contract / transaction by vote sufficient for such purpose w/o counting vote of such interested director, or if votes of disinterested directors are insufficient to constitute an act of the board, by unanimous vote of disinterested directors, or
if material facts as to such director’s interest in such contract / transaction and as to any such common directorship / officership / financial interest are disclosed in good faith / known to shareholders entitled to vote thereon, and such contract / transaction is approved by vote of such shareholders.
if interested director contract / transaction is NOT approved as stated above, contract / transaction is still NOT voidable if what?
party / parties establish affirmatively that contract / transaction was fair and reasonable to corp at time it was approved by board / shareholders
corp loans to directors and guarantees of director obligations MUST be approved how?
by shareholder vote
majority of shares entitled to vote constitutes what?
quorum
shares of directors benefited by transactin may NOT vote / be included in determination of what?
quorum
for corp’s formed after 02/22/1998 and for other corp’s if so provided in certific of incorp, board may determine what?
that specific loan / guarantee benefits the corp and either approve specific transaction / general plan authorizing loans & guarantees
officers are typically elected by whom?
board
officers may be removed by whom?
board
may officers be removed with or without cause?
both
if cert or incorp permits, officers may be elected by whom?
shareholders instead of the board, and officers so elected may only be removed with or without cause by the vote of shareholders