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7. Corporations > Organization of NY Corporations > Flashcards

Organization of NY Corporations Flashcards

1
Q

What are the three formation requirements?

A

People! Paper! Acts!

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2
Q

What is does the ‘people’ part or incorporator do?

A

executes certificate, delivers to NY department of state, and holds an organizational meeting.

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3
Q

For ‘paper’ what is the certificate of incorporation or articles?

A

It is a contract between corporation and shareholders and also between corporation and state.

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4
Q

What does the certificate of incorporation or articles include?

A

Names, addresses, corporate name, address of county in NY office of corporation, address for ss to forward service of process to, Name of incorporator/incorporators

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5
Q

Can I make a statement of duration?

A

Yes, but if you don’t then the corporation has perpetual existence.

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6
Q

Do i need a statement of purpose?

A

Yes you do. It can be very broad or narrow. Be mindful though if it is narrow because a shareholder can seek an injunction if it is breached.

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7
Q

Re capital structure, what is authorized stock?

A

Max number of shares the corporation can sell

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8
Q

Re capital structure, what is issued stock?

A

Number of shares the company actually sells

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9
Q

Re capital structure, what is outstanding stock?

A

Stock the corporation has sold and has not yet reacquired.

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10
Q

What capital structure details must you include in your cert of incorporation/articles?

A

Authorized stock, number of shares per class, info on par value, rights and limitations of class and info on any series of preferred shares.

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11
Q

What is the ‘Acts’ Requirement?

A

Incorporators sign certificate and acknowledge before notary, it is delivered to the NY department of state and the department files a compliant certificate.

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12
Q

What is done after compliant certificate is filed?

A

The incorporators hold an organizational meeting where they adopt bylaws and elect initial directors.

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13
Q

Is a corporation a separate legal person?

A

Yes

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14
Q

Can a corporation make political contributions?

A

yes, ups to 5k per year per candidate

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15
Q

Can a corporation make charitable contributions?

A

yes

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16
Q

Can a corporation guarantee a loan not in furtherance of corporate business?

A

Yes, but need approval by 2/3 voting shares

17
Q

Are the people who run the corporation or the shareholders liable for what it does?

A

No

18
Q

What liability do shareholders have?

A

To pay for their stock

19
Q

Who is liable for what the corporation does?

A

The corporation

20
Q

What must you do to show that a defacto corporation was formed?

A

That there is a relevant incorporation statute, the parties made good faith attempt to comply with it, and business is being run as corporation.

21
Q

Do you have to have bylaws in a corporation?

A

No you don’t, they aren’t necessary for incorporation.

22
Q

What do bylaws do?

A

They set up procedures and responsibilities of people like officers, set forth notice required for meetings etc.

23
Q

What if the bylaws are inconsistent with the certificate?

A

the certificate controls.

24
Q

Are bylaws filed with the state?

A

No and outsiders are not bound by them

25
Q

When are bylaws adopted?

A

At the organizational meeting

26
Q

Who/when can bylaws be amended?

A

They can be amended, repealed or adopted if certificate or shareholder bylaw allows. If no shareholder bylaw, the board cannot amend them

27
Q

Is a corporation liable for a pre-incorporation contract?

A

Only if it adopts the contract

28
Q

How can a corporation adopt a pre-incorporation contract?

A

By express adoption through board action or implied adoption by knowingly accepting the benefit of the contract

29
Q

Who is a promoter?

A

A person acting on behalf of a corporation not yet formed

30
Q

How long is the promoter liable for pre-incorporation contracts?

A

Until there is novation by the corporation. Ie: there is an agreement among the promoter, corporation and other contracting party that the corporation will replace the promoter under the contract

31
Q

How can a foreign corporation get recognition in NY?

A

By applying to NY department of state and designating ss as agent for service of process. You must show good standing.

32
Q

If a foreign company is doing business in NY without qualifying can it assert a claim in NY?

A

No

7. Corporations (7 decks)

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