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16 Cards in this Set
- Front
- Back
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What are the 4 mandatory requirements for the articles of incorporation (AoI)?
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-Name/address of corporation
-Name/address of incorporators -Name/address of registered agent -Number of authorized shares |
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Are there any special requirements for the corporations name per the AoI?
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Yes:
-Must indicate it is an incorporation (Co., Corp., Inc.) -Must not be deceptively similar to another corporation |
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What are authorized shares?
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The maximum number of shares that the corporation may sell.
If there is more than one class of shares, the AoI must also list the number of shares in each class and the attributes amount the classes |
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Are there any other provisions to be added to the AoI?
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Optional provisions:
-Purpose -Duration -Powers |
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What do the incorporators do?
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-Submit the AoI to the Secretary of State
-Holds organizational meetings Requirements: Must be 18 years old |
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What are the bylaws?
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-Rules for internal governance of the corporation
-Adopted by the directors -Amendments by either directors or shareholders -Conflicts: AoI controls |
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When will the courts pierce the corporate veil?
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-director commingles personal and corporation funds
-Parent uses a subsidiary to avoid liability (subsidiary is just a mere instrumentality of the parent company) -Gross undercapitalization |
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Will the corporation be liable for contracts entered into prior to the formation of the corporation?
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Yes but only if the corporation adopts the contract as its own. Adoption may be express or implied (i.e. corporation accepts the benefit of the contract).
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Once the corporation adopts the contract, will the promoter (i.e. person who acts for the corporation before it is formed) be liable?
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Yes unless the corporation grants a novation that is consented to by the 3rd party.
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What is the issuance of stock?
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Corporation selling its own stock
-issued shares: number of stocks actually sold -outstanding shares: share that have not been reacquired by the corporation |
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What are the requirements of a shareholder's voting agreement?
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-Writing
-Enforceable against the transferee if the existence of the agreement was conspicuous OR the transferee knew about the agreement when he acquired the shares -Duration: 10 years but can be extended |
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What is required for notice of shareholders' meeting?
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Notice:
-In writing -at least 10 days prior to meeting but not more than 60 days prior to the meeting Special Meetings: Must state when, where and purpose If notice is improper, the meeting is void UNLESS waived by signed writing at any time OR by attending the meeting |
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What is required for notice of directors' meetings?
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No notice if annual meeting
Notice only required for special meeting but notice can be waived in a signed writing at any time OR by showing up and not objecting to the meeting's being held |
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How many directors are needed for a vote to pass?
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Quorum will be majority of directors on the board unless agreement says otherwise (1/3 is the minimum)
Note: If a director leaves after a quorum is present, the quorum is broken |
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How many director votes need to pass an action?
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Majority of those present to vote (quorum)
Note: directors can't vote by proxy |
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How do shareholders vote?
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Quorum = majority of shares entitled to be case
Once a quorum is established at a shareholders' meeting it CANNOT be broken |
