VA Corps Flashcards
What are the requirements of a statutory agent?
(a) resident director/officer or lawyer
or
(b) company/partnership w/ natural person to serve
What is a 10b-5 action and what are its requirements?
The fraudulent purchase or sale of any stock or other security (e.g., bonds, stock options, and warrants) can give rise to a Rule 10b-5 action.
In order for a private person to pursue a Rule 10b-5 action, the following requirements must be met:
i) The plaintiff purchased or sold a security;
ii) The transaction involved the use of interstate commerce;
iii) The defendant engaged in fraudulent or deceptive conduct;
iv) The conduct related to material information;
v) The defendant acted with scienter, i.e., with intent or recklessness;
vi) The plaintiff relied on the defendant’s conduct; and
vii) The plaintiff suffered harm as a consequence of the defendant’s conduct.
The commission may dissolve a corporation, if the commission finds:
i) The corporation has abused its authority;
ii) The corporation has failed to keep a resident agent;
iii) The corporation has failed to file a required document; or i
v) The corporation has violated a federal employment law.
A shareholder may pursue the involuntary dissolution of a corporation if:
i) The shareholders are deadlocked;
ii) (a) The directors are deadlocked in the management of the corporation’s affairs, (b) the shareholders are unable to break the deadlock, and (c) irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally because of the deadlock;
iii) The acts of the directors or those in control of the corporation are oppressive, illegal, or fraudulent; or
iv) The corporate assets are being wasted.
In lieu of dissolution [to ward off], the corporation or one or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares.
Dissolution by Creditors
Unsatisfied Creditor judgment + corp bankrupt
What must a benefit corp do?
In an annual report to shareholders, a benefit corporation must
(1) describe the ways in which the benefit corporation pursued the public benefit and
(2) the results of those pursuits, as well as
(3) the circumstances that have hindered the creation by the benefit corporation of the general or any specific public benefit.
Va. Code Ann. §§ 13.1-787-791.
The articles of organization must include
the LLC’s name, registered agent, registered office, and business address.
Who does 16(b) apply to?
I. Only the following publicly traded corporations are protected by Section 16(b):
- (i) corporations that have securities traded on a national securities exchange, or
- (ii) corporations that have assets of (a) more than $10 million and (b) more than 500 shareholders
II. Corporate insiders: Only corporate directors, officers (e.g., president, vice-president, secretary, treasurer, or comptroller), and shareholders who hold more than 10 percent of stock
What is Section 16(b)?
During any six-month period, a corporate insider who both buys and sells his corporation’s stock is liable to the corporation for any profits made.
Delivery of notice is not required for a shareholder meeting if:
Notices for two consecutive annual meetings (and notices for all intervening meetings) were sent to the shareholder’s address of record with the corporation and were returned undeliverable;
or
Two consecutive distributions within a 12-month period were sent to the shareholder’s address of record and were returned undeliverable.
When can a shareholder commence a derivative action after making a demand:
after 90 days or if waiting would lead to irreparable harm
Generally, director self-dealing will be a violation of the duty of loyalty and make the transaction voidable, unless one of the following is true:
i) The material facts of the transaction, including the director’s interest in the transaction, were known or disclosed to the board or a committee of the board, and a majority of the disinterested directors on the a committee or the board authorized, approved, or ratified the transaction;
ii) The material facts of the transaction, including the director’s interest in the transaction, were disclosed to shareholder who were entitled to vote, and disinterested shareholders who held at least a majority of the voting shares authorized, approved, or ratified the transaction; or
iii) The transaction was fair to the corporation.
A surviving corporation in a merger does not need shareholder approval of the merger if:
(i) the number and rights of their shares are unchanged,
(ii) the number of shares entitled to vote unconditionally in the election of directors is not increased by more than 20 percent, and
(iii) the articles of incorporation are unchanged.
Va. Code Ann. § 13.1-718(F).
Regarding a transfer of all or substantially of a corporation’s assets, a shareholder is not entitled to appraisal rights unless the transfer is made to an interested person. An interest person is:
a person who, within the one-year period immediately preceding approval by the board of directors of the corporate action,
(i) holds at least 20% of the voting power,
(ii) can elect more than 25% of the corporation’s directors, or
(iii) is a senior executive officer or director who receives a benefit not generally available to shareholders.
When can someone not be indemnified by a corporation?
for (i) willful misconduct or (ii) a knowing violation of criminal law.
