Statutes (BCL & UPA) Flashcards
How many board members must be in attendance in order to form a quorum?
BCL §707: A majority of the board members must be in attendance in order to form a quorum to transact business, unless the corporation’s certificate of incorporation requires a greater number.
How many votes are required to approve a transaction
BCL §708(d): The majority of the BOD present at the time of the vote is required to approve a transaction, absent any specific provision in the certificate.
How many votes are required to approve a transaction when the board does not meet in person?
BCL §708(b): All members of the board must unanimously consent to the transaction in writing when they do not want to meet in person.
What is the minimum number of directors that can constitute a quorum?
BCL §707: A quorum cannot be less than 1/3 of the entire board.
Can a corp. raise its quorum requirements for transacting business or of a specific transaction in its cert.?
BCL §709(a)(2): a corp can raise its quorum requirements for transacting business or of any specific transaction in its cert.
Can a corporation require more votes or a unanimous vote?
BCL §709(a)(2): a corporation’s cert. can require a greater proportion of votes.
Can a corporation in its cert. create a Board Committee to vote on an issue?
BCL §712: A corporation’s certificate can designate from among its members a committee that has all the authority of the board.
Can the same person be both President and Secretary of a corporation?
BCL §715(e): One person can hold two or more offices
Can a corporation’s cert. provide that officers shall be elected by shareholders instead of by the board?
BCL § 715(b): *usually the BOD appoints officers. However, a certificate may provide that all or some officers be elected by the shareholders instead of by the board.
Who has the power to remove the CEO that the shareholders elected?
BCL §716(a): if the shareholders elected an officer, only they may vote to remove him.
The shareholders elected a CEO who’s an alcoholic and doesn’t do his job. The shareholders fail to remove him. Can anyone else remove him?
BCL §716(a): the board can remove the CEO’s authority to act as an officer. Fail-safe.
BCL §706: Removal of the Directors
Any or all directors may be removed for cause by vote of the shareholders. Certificate or by-law may provide for such removal by action of the board.
May be removed without cause by shareholders if the by-laws allow.
BCL §707: Quorum of Directos
Majority of the entire board
BCL §708: Action by the Board
(b) Written consent required by all members if action is to be taken without a meeting
(c) BOD may participate by phone or internet
(d) a majority of the directors at the time of the vote, if a quorum is present at such time, shall be the act of the board.
BCL §609: Greater requirement as to quorum and Vote of Directors
(a)(1) the proportion of directors that shall constitute a quorum for the transaction of business or of any specified item of business shall be greater than the proportion prescribed
BCL §715: Officers
(a) the board may elect
(b) the certificate of incorporation may provide that all officers or that specified officers shall be elected by the shareholders instead of by the board.
(e) any officer can hold two or more positions on the board
BCL§ 716: Removal of officers
Any officer elected or appointed by the board may be removed by the board with or without cause. An officer elected by the shareholders may be removed with or without cause, only by vote of the shareholders, but the board may suspend officers
UPA §6: Partnership
Elements:
(1) An association
(2) Of two or more persons
o UPA §2: Defines persons as individuals, corporations, entities
(3) For Profit
There must be an intent to profit
(4) Business
o UPA §2: defines business as trade, occupation, or profession
(5) Co-Owners
o Co-owners share in profits and losses
UPA §7: sharing in profits is prima facie that there is a partnership.
o Co-owners have joint and several liability
UPA §7: Determining the Existence of a Partnership
- Joint Tenancy, Tenancy in Common, part ownership, etc. does not necessarily establish a partnership.
- Sharing of gross returns doesn’t itself establish a partnership.
- Sharing of profits is prima facie evidence of partnership UNLESS profits are paid
(1) as a debt by installments or otherwise (creditor)
(2) as wages of an employee or rent to a landlord
Fenwick v. Unemployment Comp.
UPA § 15: Nature of Partner’s LIability
- All partners are liable
- Jointly and severally for everything chargeable to the partnership
- Jointly for all other debts and obligations of the partnership; but any partner may enter into a separate obligation to perform a partnership K
Martin v. Peyton
UPA §16: Partnership by Estoppel
When a person, by words spoken/written or by conduct, represents himself, or consents to another representing him to anyone, as a partner in an existing partnership, or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made.
- Intent is not necessary to establish a partnership
- If someone relies on your representation you can be held liable as being in a partnership.
- Partners have joint and several liability: creditors can go after either partner for the full amount or any division
Young v. Jones
UPA §9: Partner as an Agent of the Partnership for the Purpose of Partnership Business
- Partners can act as agents of the partnership
- Unless authorized by other partners, acts by a partner that are not apparently for carrying out the partnership business in the usual way does NOT bind the partnership.
- Unless authorized by other partners, or unless they abandoned the business, one or more BUT less than ALL partners have authority to:
- Assign the partnership property in trust to creditors;
- Dispose of goodwill of busniess;
- Do any act that makes it impossible to carry out partnership business;
- Confess a judgment;
- Submit a partnership claim to arbitration;
- No act of a partner in contravention of a restriction on authority shall bind the parternship to persons who know the restriction.
UPA §14: Partnership Bound by Partner’s Breach of Trust:
The partnership is bound to make good the loss:
Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and
Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.
UPA §18: Rules Determining Rights and Duties of Partners
A. default rules (not mandatory) B. 1. Basic profit rule: Equal shares per person 2. Basic losses rule: Follows profits C. Indemnificaiton for advances made D. 1. The distinction between contributions and loans 2. No interest on capital contributions E. Equal rights F. No Salaries G. Black ball rule H. Legislative/constitutional Rule 1. majority vote for ordinary changes 2. Unanimous vote for partnership agreement.
