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19 Cards in this Set
- Front
- Back
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What is required to forma corporation?
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People Paper Act
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What is the people requirement for incorporating?
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People is an incorporator who
1. Executes the certificate and delivers it to the Secretary of State. 2. He holds an organizational meeting with the other incorporators. |
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What is Paper requirement of incorporating?
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1. It's a contract between the corporation and shareholders.
2. It's also a contract with the state. |
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What needs to go into the Paper?
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1. Corporation name ending with suffix (corp., inc., ltd.).
2. Name and Address - County in NY of the office of corporation. 3. Agent - Sec. of State. 4. Name and address of each incorporator. 5. Duration. 6. Purpose. 7. Capital structure 8. Authorized Stock # per class. 9. Issued Stock #. 10. Outstanding Stock #. 11. Info on Par value. 12. Info on series. 13. At least one class of stock must have unlimited voting rights, and at least one class must have unlimited dividend rights. |
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What is an ultra vires act?
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It goes against the expressed purpose in the articles of incorporation.
Shareholders can seek injunction. Responsible managers are liable for UV lawsuits. |
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What Act is required to incorporate?
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1.Each incorporator - signs in front of notary.
2. File, Pay fees, and checks eligibility. 3. Department filing is conclusive evidence of valid formation (de jure corporation). 4. After filing, hold organizational meeting. |
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What happens in the organizational meeting?
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Adopt Bylaws,
Elect BoD. BoD takes over Management. |
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Why does it matter that somebody formed a corporation.
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1. Liability concerns
2. Legal Personhood Identity 3. Rules of governance (governed by incorporated state's laws). |
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What is a defacto Corp?
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1. Show there is a relevant incorporation statute.
2. Good faith effort to comply with incorporation statute. 3. Business is being run as a corporation. If conditions met, it is defacto a corporation in all actions except by the state. (rare) |
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Corporation by Estoppel?
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Where one business treats another business as a corporation, it will be estopped from bringing actions against individuals.
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Can there be a corporation without bylaws?
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Yes, but almost every corporation has them.
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What do bylaws cover?
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procedures, responsibilities, notice requirements for meetings.
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Which document controls? Bylaws or certificate(articles)?
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Certificate controls. - Bylaws are internal documents and only bind insiders of the corporation.
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How does bylaw amendment happen?
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usually shareholders have responsibility. (Sometimes BoD can amend, but only if certificate or bylaws grants authority, but Shareholders can still amend.
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Promoter
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Person Acting on behalf of corporation before it is formed (i.e. enters corp., into contracts).
Liable on Pre-Incorporation contracts until novation. |
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When is a corporation liable for pre-incorporation contracts?
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1. Expressly adopts.
2. Implicitly through accepting a benefit. |
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Secret Profit Rule:
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A promotor can't make a secret profit for dealings with the corporation. If she does, liable and has to account for the profit (return it to corporation).
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how to figure out the amount to be returned for secret profit.
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1. before promoter status - How much extra Corp. paid above FMV.
2. after promoter status - Profit that Promoter made from Corp. 3. These are just "secret" profits. |
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Why and how do foreign corps need to qualify?
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1. To sue in the state of NY.
2. They qualify by filing with sec. state, paying gees, and demonstrating proof of good standing in state of incorporation. |
