Organization of a corp

Question 1

shareholder

Answer 1

stockholders - own the corporation

Question 2

BOD

Answer 2

group in charge of managing the corp

Question 3

officers

Answer 3

agents of the corporation appointed to carry out the corporation’s policy

Question 4

liability

Answer 4

generally the corp is liable

not SH, BODs, officers

owners just risk the invest they put into the corp

Question 5

who manages a corp

Answer 5

BODs

Question 6

can ownership be transfered

Answer 6

yes, ownership is freely transferable

SH can sell their shares

Question 7

c corp taxation

Answer 7

double taxation

1. when distributions are made to SH it is taxed as income
2. corp pays taxes on its profits

Question 8

s corp taxation

Answer 8

taxed like a PS and a corp → no double tax but have multiple restrictions (ie only 100 ppl max can hold stock)

Question 9

de jure corporation

Answer 9

corporation formed in compliance with the law

Question 10

de facto corporation

Answer 10

corporation that can result when not all laws are followed

Question 11

estoppel in corporation formation

Answer 11

a corporation may be recognized as such through estoppel

Question 12

what needs to be in the AOI

Answer 12

1. name of corp followed by right abbrv ie LLC
2. name and address of each incorporator
3. name of registered agent
4. address of registered office
5. info about company stock

Question 13

ultra vires act

Answer 13

if a corp has a narrow purpose stated in its business purpose it may not take activities which do not align with that purpose. If it does, it is called an ultra vires act.

Question 14

Are UV acts enforceable under

CL?

MBCA (model business corp act)

Answer 14

CL: void and unenforceable

MBCA: enforceable and UV act can only be raised in three situations

Question 15

list 3

Under the MBCA, when can UV acts be raised

Answer 15

In the modern law UV defense is very limited so, a corp should not be allowed to get out of a K. The UV defense - to get out of a K- can be raised by/when:

1. SH sues corp to enjoin (stop) a UV act
2. Corp sues officer or director for approving a UV act
3. State brings action to dissolve a corp for committing a UV act

SH - enjoins

Corporation - punishes for approving

State - dissolves

Question 16

when does a corporations existence start

Answer 16

when articles are filed by the state (articles are notarized and fees are paid)

Question 17

who holds the organizational meeting to complete the organization of the corporation

Answer 17

if directors are mentioned in AOI → BOD holds

if directors not mentioned in AOI → incorporators hold

Question 18

if bylaws and AOI conflict, which governs

Answer 18

AOI