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Delaware Corporate Law > Subchapter I: Formation > Flashcards

Subchapter I: Formation Flashcards

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1
Q

§ 101 (a) Who can form a corporation

A

Any person or entity may incorporate a corporation in Delaware by filing a certificate of incorporation with the Department of State

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2
Q

§ 101 (b) Purpose of a corporation

A

A corporation may conduct or promote any lawful business or purposes

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3
Q

§ 101 (c) Public utilities corporations

A

Corporations for constructing, maintaining, and operating public utilities are additionally subject to Title 26

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4
Q

§ 102 (a)(1) Required contents of a certificate of incorporation: Name of a corporation

A

The certificate of incorporation shall: (i) generally have “incorporated,” “corporation,” or company” as part of the name, (ii) generally have a name not previously used, (iii) generally shall not have “trust” in the name, and (iv) shall not be called a bank unless registered as such

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5
Q

§ 102 (a)(2) Required contents of a certificate of incorporation: Registered Agent

A

The certificate of incorporation shall have the registered agent’s name and address

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6
Q

§ 102 (a)(4) Required contents of a certificate of incorporation: Classes of stock and members

A

The certificate of incorporation shall set forth the class(es) of stock, its par value(s), and its powers, preferences, and rights. This does not apply to nonstock corporations, which have classes of members with enumerated rights, powers and duties.

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7
Q

§ 102 (a)(3) Required contents of a certificate of incorporation: Any lawful activity

A

A corporation’s purpose must be stated in the certificate of incorporation. It is sufficient that the corporation’s purpose is any lawful activity. Corporate activities must be within the corporate purpose.

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8
Q

§ 102 (a)(5) Required contents of a certificate of incorporation: Incorporators

A

The certificate of incorporation shall have the name and address of the incorporator

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9
Q

§ 102 (a)(6) Required contents of a certificate of incorporation: Initial directors

A

If the incorporator’s powers are to terminate upon filing, the names, and addresses of the initial directors must be on the certificate of incorporation

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10
Q

§ 102 (b)(1) Optional contents of the certificate of incorporation: Bylaws

A

Any provision which is required or permitted to be stated in the bylaws can instead be stated in the certificate of incorporation

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11
Q

§ 102 (b)(2) Optional contents of the certificate of incorporation: Receivership

A

Verbatim provisions for stock and nonstock corporations regarding receivership

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12
Q

§ 102 (b)(3) Optional contents of the certificate of incorporation: Subscription

A

Preemptive stockholder rights to subscribe to additional issues of stock or convertible securities. These provisions must be in the certificate of incorporation for any person to have such rights

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13
Q

§ 102 (b)(4) Optional contents of the certificate of incorporation: Voting rule changes

A

Higher than default voting requirements for any corporate action

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14
Q

§ 102 (b)(5) Optional contents of the certificate of incorporation: Duration

A

A provision limiting the corporation’s duration

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15
Q

§ 102 (b)(6) Optional contents of the certificate of incorporation: Shareholder liability

A

Provisions imposing personal liability for the corporation’s debts on the stockholders

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16
Q

§ 102 (b)(7) Optional contents of the certificate of incorporation: Director Indemnification

A

Provisions eliminating or limiting a director’s personal liability for breaches of fiduciary duty. Cannot limit liability for: (i) breach of duty of loyalty, (ii) acts not in good faith or intentional misconduct, (iii) under § 174, or (iv) for transactions for which the director received an improper personal benefit

17
Q

§ 102 (c) Statutory powers in the certificate of incorporation

A

It is not necessary to include any statutory powers in the certificate of incorporation

18
Q

§ 102 (d) Conditional provisions in the certificate of incorporation

A

Many provisions can be made dependent on outside, ascertainable facts

19
Q

§ 102 (e) Reserving names

A

A corporate name can be reserved by filing an application with the Secretary of State

20
Q

§ 102 (f) Certificate of incorporation contents: Limitations on stockholder liability

A

A certificate of incorporation cannot impose liability on stockholders for attorneys’ fees in connection with internal corporate claims

21
Q

§ 103 (a) Filing documents: Execution of documents

A

Generally, the incorporator shall sign the certificate of incorporation. Other instruments shall be signed by (1) an authorized officer, (2) a designated director, (3) a majority of directors, (4) designated stockholders of record, (5) a majority of outstanding shares, or (6) holders of all outstanding stock

22
Q

§ 103 (b) Filing documents: Acknowledgement of documents

A

An instrument can be acknowledged by signature or by formal acknowledgment

23
Q

§ 103 (c)(1)-(3) Filing documents: Definition of “filing”

A

“Filing” means (1) a signed instrument delivered to the Secretary of State, (2) taxes and fees paid, (3) Secretary certifies filing

24
Q

§ 103 (c)(4) Filing documents: Filing date

A

One can make a request before or upon filing to have a filing date after the date on which it was filed. If the Secretary refuses to file a document due to some error on the filer’s part, the filing date can still be on the day of the attempted filing if the error is resolved within 5 days of receiving notice of the refusal. Any corporation that has a suspended instrument cannot receive a certificate of good standing.

25
Q

§ 103 (d) Filing documents: Date of effectiveness

A

Documents are effective upon filing. The document can specify a delay in effectiveness up to 90 days after filing. Any amendment or termination of a document with a delayed effectiveness submitted prior to the effective date must must identify what document it is amending or terminating

26
Q

§ 103 (e) Filing documents: Default rules

A

This section has the default rules for executing, acknowledging and filing these instruments, but these can be superseded by other sections

27
Q

§ 103 (f) Filing documents: Corrections

A

Whenever a filed document had an error, one can submit a certificate of correction to correct it. The certificate should mention it is a certificate of correction in its heading, specify the defect to be corrected, and set forth the entire instrument in its corrected form. The certificate has the effective date of the original instrument, except as applied against persons who are substantially and adversely affected by the correction.

28
Q

§ 103 (i) Filing documents: Effective date by affidavit

A

If the Secretary of State determines that there was an extraordinary condition that prevented a good faith attempt to deliver an instrument and pay its fees, then the delivery of the instrument can be dated to the attempted instrument

29
Q

§ 103 (j) Filing documents: Registered agent address grandfathering clause

A

Certificates of incorporation filed before Aug. 1, 2011 do not have to be amended to comply with § 131 (c)’s registered agent address requirements

30
Q

§ 104 Certificate of incorporation: Definition

A

Instruments included in this chapter include the original certificate of incorporation, any amendments, agreements of merger or consolidation, or reorganization.

31
Q

§ 105 Certificates of incorporation and other certificates: Evidence

A

Filed instruments are prima facie evidence of due filing, proper execution of filing requirements, and any facts permitted to be within the instruments.

32
Q

§ 106 Commencement of corporate existence

A

A corporation exists upon filing.

33
Q

§ 107 Power of incorporators

A

If the initial directors are not named in the certificate of incorporation, the incorporator can adopt the original bylaws and elect the directors.

34
Q

§ 108 (a) Organization meeting

A

After the certificate of incorporation is filed, the incorporator or initial board shall have an organization meeting to adopt bylaws and any other acts to perfect the organization of the corporation until the first annual stockholders’ meeting.

35
Q

§ 108 (b) Organization meeting: Notice

A

Must give two days notice of the organization meeting.

36
Q

108 (c) Organization meeting:

A

Delaware Corporate Law (1 decks)

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