Guth V. Loft Inc. Case Study

Improved Essays
10. What are the facts and outcome in the case of Guth v. Loft, Inc. and how does it apply to the duty of loyalty and good faith?
Charles Guth became the president of Loft, Inc., a Candyland restaurant chain. Guth also partly owned Grace Company, which created formulas of syrups used for soft drinks (Spamann, 2014). Loft, Inc. at the time, purchase its syrup from Coca-Cola company, however, Guth was dissatisfied with the price and decided to create a new formula with Roy Megargel (Clarkson, 2015, p. 785). This new formula was meant to create the trademark for Pepsi-Cola. While working for Loft, Inc., Guth used Loft’s credits, capital, employees and facilities to fund his new venture without Loft’s knowledge. Once Loft found out what Guth was
…show more content…
Bylaws include corporate procedures and illustrate the powers of shareholders, officers and board of directors (Moran, 1994, p.443). Since bylaws do not have to be filed by the Secretary of State, they can be easily amended and enforced as soon as approval if passed by the board of directors (Sullivan, 2016). The first step to amending bylaws would be to conduct a meeting to inform the board of directors of the purpose, specific changes and procedures concerning the amending process (Sullivan, 2016). Next, the company’s existing bylaws need to be reviewed and voting percentages must be determined. In most cases, all board of directors have the right to vote, however, voting rights vary from company to company. Some agreements require a two-thirds majority while others may only require a minimal number of votes (Sullivan, 2016). Once the amendments are drafted, a copy of the changes, including the date of the vote must be distributed and all voting parties must properly review the documents. A second meeting will then be held to collect everyone’s vote. If the vote passes, a written resolution must be prepared reflecting the changes and minutes of the meeting (Sullivan, 2016). A copy of this document must be filed within the companies’ incorporation files and the changes should be officially written in the bylaws once the meeting …show more content…
If there is a will a personal representative, executor or trustee will be assigned to manage and administer the deceased shareholders estate (Streissguth, 2012). The personal representatives’ rights will be specified in the terms of the will. A will may also place certain restrictions on the transfer of shares that occur after the shareholders death. If a shareholder does not have a valid will, state laws will govern who will inherit the shares. The transfer procedure will begin in probate court once a personal representative is assigned authority to take over the distribution of assets (Streissguth, 2012). The representative will then use his/her authority to notify the brokerage that holds the certificate of stocks and the brokerage will provide the representative with the certificates and transfer of ownership forms (Streissguth, 2012). The representative will then bring the forms to the bank. The Securities and Exchange Commission requires that an executor provides a Medallion Signature Guarantee before transferring the ownership of the shares. Once the Medallion Guarantee is processed, the representative returns the documents to the bank and a transfer agent re-issues certificated under the name of the shareholders beneficiaries (Streissguth,

Related Documents

  • Improved Essays

    The boards have also outlined the basic steps all firms should take when making the transition. Depending on the entity, the boards expect firm’s to adopt these new practice by a given date. Managing Financial Data United States businesses revenues reach staggering heights. These businesses, small and large, keep records and have fiduciary responsibilities and needs. Small sole proprietors may…

    • 813 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    As a result, there may be situations that force the property into formal probate such as both joint tenants dying at the same time. A living trust may be a better option for your real property. Refer to the book Plan Your Estate by Nolo for a more in-depth look into this topic. • Set up your bank accounts as Payable on Death Accounts (POD). Like retirement accounts, POD accounts let you list beneficiaries to your bank accounts.…

    • 712 Words
    • 3 Pages
    Improved Essays
  • Great Essays

    As a member of the board of directors I would have ensured that the company had several checkpoints in place to ensure the company had ethical financial dealings. 2. This would include having quarterly meetings that would consist of going over the company financial reports and balance sheet with the bank and the audit committee as well to see if everything is aligned. 3. Finally, I would have also indicated a new type of meeting with the shareholders and employees to demonstrate how the company is doing financially so that they may be educated on their stake in the company.…

    • 1535 Words
    • 7 Pages
    Great Essays
  • Improved Essays

    The first task is reviewing the agenda and seeing if an additional standard would be beneficial and not ineffective. This consists of the IASB taking into consideration whether it will be useful and understandable to all users and whether existing guidance already exists. Approval of adding items to the agenda is decided by a vote by all IASB members who attend the meeting. This is a public meeting and can be viewed by anyone. If the proposed standard is voted for in the meeting, it is then up to the IASB to decide whether or not to conduct the project alone or do the project with another standard-setter.…

    • 809 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Election Night Selection

    • 1889 Words
    • 8 Pages

    Therefore, the Marshal prepares enough ballots for the entire election process. Since 18 officers and standing committee chairmen are usually elected, she prepares at least 18 slips of paper for each chapter member. She must also be prepared with additional slips in case there are any run-offs. The Marshal also prepares a ballot box. – The President reviews rules of parliamentary procedure regarding election prior to the meeting.…

    • 1889 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    Glamorous Sdc Case Study

    • 879 Words
    • 4 Pages

    First of all, director of Glamorous Sdn. Bhd had called to MyPec to ask for the procedure on how to register a company (refer to Appendix 1). Then, director was sending the information that required for registration to MyPec by email as shown in the Appendix 2. The total amount of RM120.00 for registration fees will be deducted from the company’s opening capital. Next, as the law and regulations in register a company should appoint a company secretary, Glamorous Sdn.…

    • 879 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The Coca-Cola Company required that the bottlers emboss the famous Coca-Cola logo onto every bottle. However, competitor brands like Koka-Nola, Ma Coca-Co, Toka-Cola and even Koke copied or only slightly modified the spencerian script logo. These competitor bottles created confusion among consumers. While The Coca-Cola Company began litigation against these infringements, the cases often took years and the bottlers were constantly asking for more protection.” (Ryan) When they first started making the glass bottles they wanted to make the glass bottles different from the rest. They wanted to be different so that the customers who bought coke would know if it was the right stuff or a knock off.…

    • 787 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    It must be updated with changes that occur from year to year. Any policy, standard, guideline utilized to demonstrate the company’s IS capabilities must be referenced and documented in the compliance matrix. The SPG team reviews each reference in the document and makes changes as necessary then sends the updated document to the compliance team. Once the document is reviewed and validated by the compliance team, they will provide their endorsement so the document can be submitted for final approval. In conjunction with the compliance matrix process, the SPG team works with the coordinators to make sure they have the correct people identified who provide signoff of the compliance matrix.…

    • 1239 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    COMBINING BENEFITS OF AN LLC WITH AN S-CORP The status of an LLC can always be converted to being S-Corp. this must be done after comprehensive understanding of both the pros and cons of the process and consultations with your attorney. To initiate the process, form 2553 must be filed two and a half months prior to the start of the tax year of election (an election with the IRS for an LLC to be taxed as an S-Corp). Sufficient information regarding S-Corp status can be found by visiting IRS.gov Legally, an LLC is a limited liability company but can be treated as an S-Corp for taxation purposes. When filing the election form remember to do inquiry on other election entities like the S-Corp MERITS OF LIMITED LIABILITY COMPANIES Consider the following merits; • Limited Liabilities to Members; Members are ensured protection from personal liability arising from bad business decisions. If the company incurs losses or debts, the members shall not be indebted in any way to help in recovery.…

    • 1174 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    FINAL ACCOUNTING AND PAYCHECK Employees must return all credit cards, complete all expense reports and turn in time sheets during the notice period. Final paychecks will be mailed on the next regular payday. EMPLOYEE ACKNOWLEDGMENT FORM CyberCore Security Inc. Squared (“CCSI2”) Employee Handbook describes important information about CCSI2 personnel policies and procedures, and I understand that I should consult my Supervisor regarding any questions not answered in the Employee Handbook. I have entered into my employment relationship with CCSI2, voluntarily and acknowledge that there is no specified length of employment. Accordingly, either CCSI2, or I can terminate the relationship at will, with or without cause, at any…

    • 770 Words
    • 4 Pages
    Improved Essays

Related Topics