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MEE- Rule Statements > Corporation > Flashcards

Corporation Flashcards

(158 cards)

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1
Q

Corporation Formation

A

A corporation is formed by filing articles of incorporation with the Secretary of State.

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2
Q

Characteristics

A
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3
Q

Articles of Incorporation-Generally

A
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4
Q

Mandatory Provisions - Articles of Incorporation

A
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5
Q

Organization Meeting and Bylaws

A
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6
Q

Bylaws in General

A

Shareholders may amend a corporation’s bylaws

Bylaws may include any provisions for regulation and management of the corporation that are not inconsistent with law or the articles of incorporation

Bylaws may contain a requirement that the corporation include in its proxy materials one or more individuals nominated by a shareholder

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7
Q

Adoption and Amendment

A
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8
Q

De Jure Corporation

A

A de jure corporation is one that is organized in compliance with the statute. Failure of the organizers to comply with a mandatory statutory provision will preclude de jure status. In general, corporate existence begins when the articles of incorporation become effective; a certified statement of the fact of incorporation by the state is generally considered de jure evidence.

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9
Q

De Facto Corporation

A

If statutory compliance is insufficient for de juro status, a de facto corporation still have been formed if; (1) a good face, colorable attempt was made to comply with the incorporation statute, and (2) the corporate principals, in good faith, acted as a corporation.

De facto status isolates directors and shareholders from liability except in a direct action by the state.

The de facto doctorine hardly applies today because the state must approve the articles before they are filed and a statement by the state of the fact of incorporation is conclusive evidence of incorporation.

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10
Q

Corporation by Estoppel

A

Absent de jure or de factor status a corporation may still exist by estoppel. If the creditor always dealt with the principals as if they were a corporation, he will be estopped from later alleging that the corporation is defective if it would unjustly harm the principals.

In the same manner, a defendant who held itself out to be a corporation cannot try to avoid liability by claiming the plaintiff has no cause of action because the defendant is not a legal entity.

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11
Q

Ultra Vires Doctrine

A
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12
Q

Piercing the Corporate Veil

A

As a general rule, a corporation will be looked at as a separate legal entity; however,a court may disregard its separate entity and hold shareholders or affiliated corporations liable on corporate obligations. This is known as piercing the corporate veil.

There are three main factors the court will look to when determining if the corporate veil was pierced: (1) alter ego, (2) inadequate capitalization, (3) failure to comply with corporate formalities.

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13
Q

Alter Ego

A
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14
Q

Inadequate Capitalization

A
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15
Q

Failure to Comply with Corporate Formalities

A
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16
Q

Liability

A
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17
Q

Promoters

A
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18
Q

Promoter Relationship to the Corporation

A
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19
Q

Duty to Disclose

A
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20
Q

Promoters’ Liability for Breach of Fiduciary Duty

A
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21
Q

Preincorporation Contracts- In General

A
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22
Q

Liability of the Promoter

A

As a general rule, promoters are personally liable on any contract that they enter into on behalf of a yet-formed corporation, unless the circumstances demonstrate that the other party looked only to the corporation for performance.

Personal liability will continue even after the corporation is formed unless there is a; (1) valid novation or (2) an agreement to release liability.

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23
Q

Novation

A
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24
Q

Liability of the Corporation

A
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25
Novation or Adoption
26
Express Adoption
27
Implied Adoption
28
Acceptance of Benefits
29
Liability of Third Party
30
Stock Subscription Agreement
31
Debt Securities
32
Debentures
33
Bonds
34
Notes
35
Equity Securities
36
Right to the Residual
37
Dividend Rights
38
Liquidation Rights
39
Voting Rights
40
Common Stock
41
Preferred Stock
42
Shares in Series
43
Fractional Shares and Scrip
44
Hybrid Securities
45
Balancing Debt and Equity
46
Share Issuance
47
Authorization of Additional Shares
48
Consideration for Shares
49
Share Certificates
50
Preemptive Rights
51
Dividend
52
Shareholders' Rights to Dividends
53
Contractual Rights to Dividends
54
Bad Faith Refusal to Declare Dividends
55
Remedies for Breach (Dividends)
56
Procedure - Declaration & Payment of Dividends
57
Shareholders' Rights After Declaration
58
Unclaimed Dividends
59
Liability for Improper Dividends
60
Good Faith Exception - Liability for Improper Dividends
61
Repurchase
62
Redemption
63
Management and Control
64
Shareholder Rights
65
Shareholder Meetings
66
Notice of Shareholder Meetings
67
Record Date & Shareholder List
68
Quorum Shareholder Voting
69
Consent in Lieu of Meeting Shareholder Voting
70
Qualification of Voters Shareholder Voting
71
Proxy Voting
72
Shareholder Voting Agreements
73
Voting Trust
74
Straight Voting Election of Directors
75
Cumulative Voting
76
Shareholders Right to Information
77
Numbers - Directors
78
Qualifications - Directors
79
Election & Removal of Directors
80
Vacancy
81
Removal
82
Time & Place Meetings of the Board of Directors
83
Notice Meetings of the Board of Directors
84
Quorum of Directors
85
Vote of Directors
86
Director Participation
87
Defects in a Meeting
88
Action by Committee
89
Directors' Objections to Actions
90
Officers
91
Authority of Corporate Officers
92
Actual Authority
93
Apparent Authority
94
Ratification
95
Officer Liability
96
Vacancies & Removal
97
Standard of Care
98
Business Judgment Rule
99
Improper Declaration of Dividend
100
Distribution During Liquidation
101
Improper Redemption & Repurchase of Shares or Purchasing Corporation's Shares
102
Failure to Give Notice to Barred Creditors
103
Responsibility for Acts of Others
104
Burden of Proof Responsiblity for Acts of Others
105
Duty of Loyalty
106
Business Dealings with the Corporation
107
Corporate Opportunity
108
Competition with Corporation
109
Burden of Proof Competition with Corporation
110
Duties of Controlling Shareholders
111
Rule 10b-5
112
Insider Trading Action
113
Tippers
114
Misappropriation of Inside Information
115
Section 16(b) Recovery of Short Swing Profits
116
Close Corporation
117
Statutory Provisions -Close Corporation
118
Resolution of Disputes & Deadlock
119
Stock Transfer Restrictions
120
Right of First Refusal
121
Buy-Sell Agreement
122
Fiduciary Duty of Shareholders in a Close Corporation
123
Fundamental Changes in Corporate Structure
124
Amendment of Articles of Incorporation When Permitted
125
Board Resolution Amendment of Articles of Incorporation
126
Amendments Authorized by Majority Vote of Board Directors
127
Dissenters Appraisal Rights
128
Merger
129
Consolidation
130
Share Exchange
131
Board Resolution for Merger
132
Board Resolution for Share Exchange
133
Shareholder Approval
134
Short Form Merger
135
Effect of Merger or Consolidation
136
Sales of Substantially All Assets
137
Recapitalizations
138
Dissenting Shareholders Appraisal Rights
139
Voluntary Dissolution
140
Judical Dissolution
141
Administrative Dissolution
142
The Corporation After Dissolution
143
Tender Offer
144
State Regulation
145
Federal Regulation of Tender Offers
146
Requirements for Section 16(b) Actions
147
Direct Suit
148
Derivative Suit
149
Limited Liability Company
150
Professional Limited Liability Company
151
Articles of Organization
152
Operating Agreement
153
Manager Managed
154
Member Managed
155
Owner Liabilty & Ownership Rights -Limited Liability Company
156
Amending Bylaws
Both the board and shareholders have the power to amend the bylaws Power belongs exclusively to the shareholders if 1) corporation's articles reserve that power exclusively to shareholders; or 2) shareholders in amending, repealing, or adopting a bylaw expressly provide that board of directors may not amend, repeal, or reinstate that bylaw Shareholder-approved bylaw provisions can amend or repeal existing bylaw provisions
157
Direct v. Derivative Suit
A direct suit is one in which a shareholder sues on his own behalf to redress an injury to his interest as a shareholder A derivative suit is one in which a shareholder sues on behalf of the corporation to redress a wrong to the corporation when it fails to enforce its right, usually a breach of fiduciary duty A shareholder bringing a derivative suit must first attempt to persuade the board of to enforce the corporation's right by making a written demand upon the board Whether a claim is direct or derivative often turns on who is injured and who will receive the relief sought by the plaintiff
158
Shareholder Liability
As a general rule, a corporation will be looked upon as a separate legal entity, distinct from its shareholders. Shareholders are generally not personally liable for the debts and obligations of the corporation and the creditors of the corporation are limited in recovery of any claim to the assets of the corporation.

MEE- Rule Statements (7 decks)

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