Flashcards in Corporations Deck (223)
New York Business Corporations Law ("BCL")
Formation Req's (3)
Incorporators - What do they do?
1. Execute the certificate
2. Deliver it to department of state
3. Hold organizational meeting
Incorporators - How Many?
1 or more.
Incorporators - Who can be one?
Adult humans only. No entities.
Certificate of Incorporation - Purposes
1. Contract between corporation and shareholders
2. Contract between corporation and state. @@
Certificate of Incorporation - Required Info
1. Names and addresses
2. Statement of duration
3. Corporate purposes
4. Capital Structure
Certificate of Incorporation - Names and Addresses
1. Corporate Name
3. Corporate agent @@
4. Name and address of incorporator
MUST contain "Corporation," "Incorporated," or "Limited"
COUNTY in New York of office of the cooperation.
Corporate Agent for Service of Process
NY Secretary of State @@
Certificate of Incorporation - Statement of Duration
If silent, Corp will have PERPETUAL existence.
Certificate of Incorporation - Purpose Statement
Corporate statement of purpose is required.
Statement of Purpose - Conduct Outside Scope
Ultra vires act
1. Contract/certificate still valid.
2. Shareholders can seek an injunction against activity
3. Responsible managers are liable to corporation for ultra vires losses.
Maximum number of shares the corporation can sell
The number of shares the corporation has actually sold
Stock the corporation has sold and has not reacquired.
What must be included in certificate re: stock?
1. Authorized stock
2. Number of shares per class
3. Information on par value - rights, preferences, and limitations of each class
4. Info on any SERIES of preferred stock
(At least one series with unlimited voting, and one series with unlimited dividend)
Formation - Acts Required
1. Incorporator signs certificate before NOTARY
2. Incorporator delivers to NYS DoS + pay fee
3. DoS files certificate
4. Incorporator holds ORGANIZATIONAL MEETING
What is the effect of the DoS filing the certificate?
Conclusive evidence of valid formation - de jure
What happens at ORGANIZATIONAL MEETING?
1. Adopt by-laws
2. Elect initial directors
Can a corporation make political contributions?
Yes, but no more than $5,000/year per candidate or organization.
Can a corporation make charitable contributions?
Yes & unlimited
Can a corporation guaranty a loan that is NOT in the furtherance of corporate business?
Yes, if approved by 2/3's of the shares. @@
Are SH's liable for the conduct of the corporation?
SH's have LIMITED LIABILITY
SH Limited Liability
SH's are liable only to pay for their stock and not generally liable for what the business does.
De Facto Corporation must establish
1. there is a relevant incorporation statute (e.g. BCL)
2. parties made a good faith, colorable attempt to comply with it; and
3. the business is being run as a corporation
De Facto Corporation - Status in NY
Thought to be abolished in NY under the BCL, but it MAY be available in very rare circumstances.
Corporation by Estoppel
One dealing with a business as a corporation, treating is as a corporation may be estopped from denying the business's corporate status.