Organization of NY Corporations Flashcards
(32 cards)
What are the three formation requirements?
People! Paper! Acts!
What is does the ‘people’ part or incorporator do?
executes certificate, delivers to NY department of state, and holds an organizational meeting.
For ‘paper’ what is the certificate of incorporation or articles?
It is a contract between corporation and shareholders and also between corporation and state.
What does the certificate of incorporation or articles include?
Names, addresses, corporate name, address of county in NY office of corporation, address for ss to forward service of process to, Name of incorporator/incorporators
Can I make a statement of duration?
Yes, but if you don’t then the corporation has perpetual existence.
Do i need a statement of purpose?
Yes you do. It can be very broad or narrow. Be mindful though if it is narrow because a shareholder can seek an injunction if it is breached.
Re capital structure, what is authorized stock?
Max number of shares the corporation can sell
Re capital structure, what is issued stock?
Number of shares the company actually sells
Re capital structure, what is outstanding stock?
Stock the corporation has sold and has not yet reacquired.
What capital structure details must you include in your cert of incorporation/articles?
Authorized stock, number of shares per class, info on par value, rights and limitations of class and info on any series of preferred shares.
What is the ‘Acts’ Requirement?
Incorporators sign certificate and acknowledge before notary, it is delivered to the NY department of state and the department files a compliant certificate.
What is done after compliant certificate is filed?
The incorporators hold an organizational meeting where they adopt bylaws and elect initial directors.
Is a corporation a separate legal person?
Yes
Can a corporation make political contributions?
yes, ups to 5k per year per candidate
Can a corporation make charitable contributions?
yes
Can a corporation guarantee a loan not in furtherance of corporate business?
Yes, but need approval by 2/3 voting shares
Are the people who run the corporation or the shareholders liable for what it does?
No
What liability do shareholders have?
To pay for their stock
Who is liable for what the corporation does?
The corporation
What must you do to show that a defacto corporation was formed?
That there is a relevant incorporation statute, the parties made good faith attempt to comply with it, and business is being run as corporation.
Do you have to have bylaws in a corporation?
No you don’t, they aren’t necessary for incorporation.
What do bylaws do?
They set up procedures and responsibilities of people like officers, set forth notice required for meetings etc.
What if the bylaws are inconsistent with the certificate?
the certificate controls.
Are bylaws filed with the state?
No and outsiders are not bound by them
