Term
| liability for pre-incopration transactions |
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Definition
promoters are liable
corps are liable only if they ratify promoter's actions |
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Term
| required info in articles of incorporation |
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Definition
1. name of corporation
2. addresses (HQ, registered office & incorporators)
3. number of authorized shares |
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Term
| corporate name requirements |
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Definition
must contain 1 word or abbrev.: "corporation," "company" or "incorporated"
can't
1. imply affiliation w/gov org
2. corp made for illegal purpose
3. corp is natural person (can't call it Eric Corp Marin) |
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Term
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Definition
| made good faith effort to file articles but failed |
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Term
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Definition
corp takes action outside it's purpose.
Shareholder, corp or state can sue. |
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Term
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Definition
1. statues (most powerful)
2. articles of incorp
3. bylaws (least powerful) |
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Term
| state tax of FL corporations |
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Definition
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Term
| 2 rights that at least one class of stock must have |
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Definition
1. final voting rights
2. ability to receive net assets |
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Term
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Definition
by default - the directors
articles of incorp can give authority to shareholders |
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Term
| when can a corp not make distributions (dividends) |
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Definition
1. equity test - corp would not be able to pay its normal costs; or
2. balance sheet test - it would cause the corp to have less $ than its current debts |
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Term
| priority of claims on liquidation of corp |
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Definition
1. creditors (includes employees owed back pay)
2. preferred shareholders
3. common shareholders |
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Term
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Definition
insider (director/officer/shareholder w/more than 10% of stock) can't go short on stock (sell some of stock at high price, and then buy back at low price a few months later)
only applies to public stock though |
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Term
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Definition
must be held annually
directors or shareholders w/>10% of stock can call special meeting |
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Term
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Definition
| simple majority of shares present at meeting |
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Term
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Definition
when SH1 has 70 shares of stock and SH2 has other 30, and there are 3 directors, total votes are shares*amount of directors so SH1 has 210 & SH2 has 90. SH2 can cast all 90 votes for 1 director
not default rule |
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Term
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Definition
shareholder sues on own behalf
ex: "hey those other shareholders got dividends, I want my dividends!) |
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Term
| derivative shareholder suit |
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Definition
shareholder sues on corp's behalf (after filing demand to get the corp to sue on its own behalf)
ex: "hey, that officer is embezzling from the corp & it's costing the corp & me money!" |
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Term
| voting agreement (voting pool) |
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Definition
| shareholders agree on how to vote. Must be in writing. May be specifically enforced |
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Term
| corp paying for P shareholder derivative suit |
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Definition
| if corp recovers "substantial benefit" as a result of shareholder's suit, it must reimburse |
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Term
| if corp is D, when may it seek reiumbusement from P shareholder |
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Definition
1. shareholder sues for improper purpose; or
2. no reasonable cause for suit |
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Term
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Definition
in general no duty to other shareholders
exception: controlling shareholders may have fiduciary duty when
1. selling controlling interest to outsider
2. seeking to eliminate other shareholders
3. shareholder oppression |
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Term
| director minimal requirements |
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Definition
| be a natural person at least 18 yrs old |
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Term
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Definition
| not all of directors end term at same time (prevents hostile takeover) |
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Term
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Definition
1. perform in good faith
2. act as reasonable person would
3. entitled to rely on any info he deems reliable (from trained pros, committees etc)
4. duty of loyalty |
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Term
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Definition
| director liable for breach of care if they consciously disregarded corp's interest, or engaged in improper self-dealing |
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Term
| how to make director self-dealing proper |
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Definition
1. director fully discloses his interest & majority of disinterested directors approve
2. full disclosure of interest & shareholders approve; or
3. transaction was fair & reasonable to corp |
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Term
| usurping corp opportunity, when must director offer to corp 1st |
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Definition
1. interest or expectancy test - whether corp has existing interest or right in the deal
2. line of business test - whether the deal is within corp's ordinary or prospective line of business
failure to do so is breach of loyalty |
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Term
| when must corp indemnify director |
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Definition
| costs incurred in successfully defending a claim against director |
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Term
| when may corp indemnify director |
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Definition
| director breached duty of care in good faith |
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Term
| when corp may not indemnify director |
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Definition
| director breached duty of loyalty |
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Term
| long form (2 diff corps) merger requirements |
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Definition
1. directors of both companies approve merger
2. majority of voting shares of each company approve; and
3. file docs w/state (plan of merger, new articles etc) |
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Term
| short form (parent & subsidiary) merger requirements w/out director approval |
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Definition
parent owns at least 80% of subsidiary shares
ABC global inc. owns 80.1% of ABC 'Murica inc. & merges w/it because it can |
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Term
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Definition
| board or shareholders only have to approve if corp selling all or substantially all of assets outside of usual course of business |
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Term
| shareholder right of appraisal |
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Definition
SH who voted against merger may get shares appraised & get paid if
1. shareholder has right to vote on merger
2. shareholder sends written objection before vote on merger
3. shareholder votes against merger |
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Term
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Definition
| directors propose & shareholders approve |
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Term
| involuntary dissolution by Dept of legal affairs |
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Definition
1. corp achieved charter through fraud; or
2. corp engaged in continuing pattern of abusing its authoritah |
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Term
| involuntary dissolution by SH |
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Definition
1. directors are deadlocked & it causes injury; or
2. shareholder deadlock
if corp has < 35 SH add:
3. corp assets wasted; or
4. directors acting illegally, oppressively or fraudulently |
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Term
| involuntary dissolution by creditor |
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Definition
1. creditor has judgment against corp & corp will be insolvent; or
2. corp admitted to owing $ & it will be insolvent |
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Term
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Definition
any out of state corp
must register w/state if it wants to sue in FL court |
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Term
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Definition
1. fewer than 100 shareholders
2. those shareholders are humans (citizens & permanent residents only), estates & some non-corporate entities
3. only 1 class of stock
4. corp liability
5. taxed like partnership (dividends don't get taxed) |
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Term
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Definition
| default corporation. Corp income is taxed & then shareholders have to pay tax on their dividends |
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Term
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Definition
voting & liability like corp
taxed like partnership
doesn't require unanimous vote for adding members |
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Term
| proxy agreements last for |
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Definition
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Term
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Definition
ot declare distributions, except within limits sets by the board;
recommend actions that require shareholder approval; fill vacancies on the board or its committees; or
adopt, amend, or repeal bylaws |
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Term
| who may vote for vacant director spots |
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Definition
| majority of the remaining board |
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