Pg 11 Flashcards
What are bylaws?
The inner working document of the corporation that says how the corporation actually operates and includes all details of the structure of the corporation and internal governance
What are things that should be included in bylaws?
– the number and qualifications of directors and officers – resignation and removal process – filling vacancies – powers and duties – meetings of directors – formalities for voting – transfer of stock – committees – compensation and indemnification
What are the requirements for the bylaws of a corporation to be?
They must:
– be reasonable [cannot conflict with the state laws of incorporation]
– operate equally on everyone of the same class
What is the relationship between bylaws of a corporation and statutes?
They are subordinate to statutes, so if anything is in conflict in the bylaws, it is void
Who has the authority to approve, amend, and appeal bylaws?
Shareholders, but that power can sometimes be delegated to directors
What happens if a corporation doesn’t adopt bylaws?
The local corporate statutes provide an “off the rack“ set
How are bylaws adopted?
Usually by directors at the organizational meeting
Who has the authority to change the articles of incorporation?
The board
What is involved in getting a corporate seal and a minute book?
- get blank certificates for shares of stock, have them printed, and issued
- open a corporate bank account
- prepare employment contracts
- get taxpayer identification numbers and government permits
Are corporate seals required?
Not anymore
Why is it important to keep track of all of the details of corporate life?
In case you get sued and the plaintiff challenges the legitimacy of the corporation and wants to pierce the corporate veil. The record will show that the corporation observed corporate formalities
What happens at the first organizational meeting of a corporation?
- elect directors
– adopt bylaws
– accept pre-incorporation subscriptions and contracts
– establish a principal office
– fix the place for regular director meetings
– all housekeeping details of the corporation are dealt with
What is the notice that must be given before a meeting of incorporators or directors?
Notice is required, usually 3 to 5 days in advance. This can be waived by all incorporators or directors by attending the meeting or executing a written waiver of notice
How do the minutes work for a first organizational meeting?
They are prepared in advance of the meeting and then adopted at the meeting and act as a script
Is the first organizational meeting of a corporation private or public?
This is a private meeting that is not open to the public
