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14 Cards in this Set
- Front
- Back
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01 Corporation
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Under BCL, a corporation is a legal entity which is created in accordance with statutes.
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02 Promoters
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Under BCL, a promoter is the person that conceives of the idea and purpose of the corporation.
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03 Incorporator
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Under BCL, the incorporator files the certificate of incorporation with the secretary of state.
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04 By-Laws
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Under BCL, the by-laws of a corporation is an agreement between the corporation and its shareholders outlining each of the parties' respective obligations.
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05 Business Judgment Rule
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Under BCL, a court will not second guess a business decision if it was made in good faith, was reasonably informed, and had a rational basis. Directors are not guarantors of success; however, they must be prudent.
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06 Duty of Loyalty (Specific to Interested Director Transactions)
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Under BCL, a director must act in good faith and with the conscientiousness, fairness, morality, and honesty that the law requires of fiduciaries.
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07 Duty of Care
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Under BCL, a director must discharge his duties in good faith and with that degree of diligence, care, and skill that an ordinary prudent person would exercise under similar circumstances in like position.
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08 Breach of Duty of Care - Nonfeasance (Director Does Nothing)
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Under BCL, a director is liable if he breached his fiduciary duty and his breach caused a loss to the corporation.
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09 Breach of Duty of Care - Misfeasance (Director Does Something that Hurts the Corporation)
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Under BCL, a director is liable if he breached his fiduciary duty and caused a loss, but will not be liable of he meet the business judgment rule.
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10 Corporate Opportunity Doctrine
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Under BCL, a director, officer, or shareholder cannot usurp a corporate opportunity. A corporate opportunity is something that the corporation needs or has an interest of expectancy in, or that is related to the business of the corporation.
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11 Indemnification
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Under BCL, indemnification is the assumption of financial responsibility by a corporation for actions taken by directors and officers in their official capacities on behalf of the corporation.
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12 Derivative Actions
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Under BCL, a derivative action is a lawsuit brought by an existing shareholder on behalf of the corporation against the directors, management, or other shareholders of the company; the cause of action is typically grounded on an alleged breach of duty.
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13 Ultra Vires
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Under BCL, untra vires literally means "beyond the powers."
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14 Preemptive Rights
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Under BCL, preemptive rights are the right to purchase shares to maintain a shareholder's proportional interest in a corporation.
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