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30 Cards in this Set
- Front
- Back
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What are the three things you need to form a corporation?
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1) People 2) Paper 3) Act
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Who are the "people requirements for forming a corporation?
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1) Incorporators, must have more than 1, can be person or entity
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What is the Paper requirement in forming a corporation?
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1) Articles of incorporation must be filed with SOS
2) Must have names and addresses of corporation, incorporators, initial director and registered agent |
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How long can a corporation last?
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FOREVER
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What has to be said on a "Statement of Purpose"?
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Statement of Purpose can be very general
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What are acts done outside of a statement of purpose?
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Ultra Vires acts, but today they are valid until S/H seeks injunction.
If there is a loss managers are liable |
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What is "Capital Structure"
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1) Authorized stock=man
2) Issued Stock=actual 3) Outstanding Stock= shares issued and not reacquired |
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What must the articles include about Capital Structure?
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1) authorized stock,
2) Shares per class 3) info on voting rights or preferences |
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What is the act requirement?
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Deliver Articles to SOS and pay fees SOS accepts=valid formation
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How are internal affairs governed?
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Internal affairs governed by state of formation
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What kind of entity is a corporation?
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Corporation is a seperate legal person (can sue, be sued, hold property, be a partner, donate to charities)
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What kinds of tax implications are there for corporations?
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Corp is taxed, then S/H are taxed unless you are an S. Corp (100 or less human shareholders no public trading one class of stock)
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General Rule: What are directors, officers, and shareholders liable for?
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Nothing, the corporation is liable for what it does
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What happens when you fail to form a corporation?
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Defacto Corp: Personally liable for business debts, but S/H not liable
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What are DeFacto Corporation requirements?
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1) Releveant corporate statute 2) good faith effort to comply with statute 3) excercise of corp privleges
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What is a corporation by estoppel?
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One who treats business as a corporation, may be estopped fromy denying that it is.
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What are Bylaws?
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Internal corporate rules. Corps don't have to have them, they are internal, the BOD adopts them, and articles are superior
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What happens in a pre-incorporation contract?
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General Rule: Corp not liable on pre-incorporation K until it adopts the K (expressly or accepting benefits of the K)
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What is an issuance of Stock?
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Corporation sells its own stock to raise money
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What is a subscription?
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written offer to buy stock
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What happens if there are pre-incorporation subscriptions?
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They are irrevocable for 6 months, post incorporation.
Regular subscriptions are revocable until accepted by corporation |
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What is consideration for stock?
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Money, property, or past services
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Who determines what to sell the stock for?
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The BOD, and it is conclusive
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What is Par stock?
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Minimum issuance price
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What is treasury stock?
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Stock the corporation issued then reacquired (BOD can set any price they want)
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What is watered stock?
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Corp sells 10k shares of 3 par to X for 22k 8k=watered stock)
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Who is liable for watered stock?
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1) The guy that bought it
2) The directors if knowingly do it |
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What are pre-emptive rights?
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Rights of S/H to maintain her % of ownership whenever there is new stock (ONLY IF PROVIDED FOR IN ARTICLES and SPLIT OF AUTHORITY WHETHER TREASURY STOCK APPLIES HERE)
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What are the requirements for Directors and Officers?
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1) Human 2) number in articles 3) initial directors are named in articles
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Who can remove directors?
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S/H by majority vote with or without cause.
If there is a vacancy on board, then BOD or S/H, but if S/H caused vacancy they have to fill it |
