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37 Cards in this Set
- Front
- Back
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Which trumps: bylaws or certificate?
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Certificate
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Who can amend bylaws?
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Only SHs unless certificate or SH bylaws allow board to do so
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Can subscriber revoke a subscription?
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Pre-incorporation subscription: cannot revoke for 3 months
Post-incorporation subscription: revocable until accepted by board |
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Forms of consideration allowed at issuance
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Money, tangible or intangible property, serviced already perfomed, binding obligation to pay in fuure, binding obligation to perform servies in the future
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Who can remove directors?
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SHs: with cause, or without cause if allowed by certificate or bylaws
Directors: with cause only if certificate or bylaws allow |
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How can board act?
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Unanimous written consent, or at meeting
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When are proxies and voting agreements allowed?
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At SH meetings, but not at board meetings
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What powers may a board NOT delegate?
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Powers to:
1. Set director compensation 2. Fill board vacancy 3. Submit fundamental change to SHs 4. Amend bylaws (But a committee can recommend any of these things for board action) |
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BJR
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A court will not second-guess a board decision if it was made in good faith, was reasonably informed, and had a rational basis. A director is not a guarantor of success.
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When does BJR apply
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Duty of care cases, not duty of loyalty
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Can board set compensation of directors?
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Yes, if it's reasonable and in good faith. Excessive comepensation is corporate waste.
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Which directors are liable if improper distribution occurs?
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All except those who dissented in writing.
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What duties do officers owe?
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Same as directors
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What powers to officers have?
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Officers are agents: they cab bind corporation when they have the authority to do so.
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Who can remove officer for cause?
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Directors, AG, or 10% of all shares
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When is reimbursement PERMISSIBLE?
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When person acted in good faith and for a purpose reasonably believed to be in corp.'s best interests.
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Can certificate or bylaws indemnify the board? (Essay language)
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Certificate may eliminate director liability to the corporation or SHs for damages for breach of duties, except where director (i) acted in bad faith, (ii) with intentional misconduct, (iii) received an improper financial benefit or (iv) approved an unlawful distribution or loan.
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Can SHs manage a corporation?
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In a closed corporation, if certificate allows, all incorporators or SHs approve it, and all subsequent SHs have notice (conspicuously noted on front and back of shares)
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A members of PC liable for PC's contracts or rent due on leases?
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No
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Can D/O bring derivative suit?
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No, but can sue other D/O in her own name
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Requirements for proxy statement
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In writing, signed by SH or authorized agent, directed to secretary of corporation
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Max length for voting turst
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10 years
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How are SH resolutions passed?
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By majority of shares that ACTUALLY vote
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When is cumulative voting allowed?
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When certificate says so
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How many votes to you need to win seat in cumulative election?
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1 seat more than this percentage:
100 / (X + 1) X = number of directors |
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When is restriction on stock transfer OK?
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When it's not an undue restraint on alienation
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Right of first refusal on stock transfer - ok?
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Yes, if matching offer or reasonable price
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Right requiring stock holder to get board approval to sell - ok?
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Probably not
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What can be used for dividends?
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Surplus, not stated capital
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Must redemptions be uniform across class?
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Yes
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Must repurchases be uniform across class?
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No
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What is required for a fundamental corporate change?
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Usually, director AND SH approval, and corp. must notify dept. of sate
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When are SH rights of appraisal triggered?
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Some amendments to cert.
Consolidation Corp. merges into another Corp. transfers substantially all its assets Corp.'s shares are acquired in share exchange BUT NOT if corporatino is listed on national security exchange |
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How does SH perfect right of appraisal?
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Files written objection and intent to demand pament BEFORE SH vote, abstains from voting (or votes against resolution), and makes written demand after vote
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Who must approve a consilidation or merger?
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Board AND SHs of each corporation, unless parent is purchasing subsidiary and owns 90% of it
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Do SHs owe fiduciary duties to each other?
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Generally, no, but controlling SHs owe duty to minority SHs to exrcise the utmost good faith.
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Can controlling SH sell shares and keep control premium?
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Yes, unless she sells to looters, converts a corporate opportunity, commits fraud or acts in bad faith.
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