Chapter 9 Flashcards
(30 cards)
Promoter
One involved in organizing a corporation, kinda like joint venturers
Pre incorporation contracts
Agreements entered into by promoters on behalf of yet to be formed corporation; promoter liable for them, even after corp is formed
Ratification
Approval of a transaction
Relations back
Actions are viewed as having occurred on an earlier date
Novation
Substitute of one party or doc for another
Assignment
Transfer of one’s interest in an asset
Nunc pro tunc
Now for then; (earlier)
Preincorporation share subscription
Offers to purchase stock when the corporation is later formed; used to raise money
Internal affairs doctrine
Laws of jurisdiction of incorporation apply to internal affairs and governance
Name reservation
Reserving the name to a corporation while it’s incorporation papers are prepped
Name saver
Corporation formed by another for purpose of reserving corporate name in foreign jurisdiction
Assumed name
Name under which a business operates that is not the name under which it was formed
Articles of incorporation
Document that creates a corporation
Broad purpose clause
Formed to conduct any legal activity
Authorized shares
Number of shares set forth in a corporations AOI that the corporation has authority to issue
Common stock
Stock of a corporation having no special privileges
Preferred stock
Stock of a corporation issues with desirable privileges
Pat value
The minimum amount which a corporations stock can be sold
Preemptive right
Right of shareholders to buy pro rata shares of newly issued stock before it is offered to shareholders; to maintain ownership interest
Opt out/in provisions
State laws providing that preemptive rights exist unless denied in the AOI/
Bylaws
…presented for adoption at the first organizational meeting; not filed with state; easier to amend than AOI; not publicly available; contract between corp and shareholders;
