Home > Flashcards > Print Preview
The flashcards below were created by user
on FreezingBlue Flashcards
. What would you like to do?
- Corp properly formed if filing of art of incorp, including name of corp, incorps name and addresses, and payments of fees. May name initial directors. Must containt incorp, corp, etc. in name. Organizational meeting must be held within 120 days. By end, must have bylaws, directors, and officers. Then must file minutes of meeting with state.
- Articles must state number of shares
anyone who organizes or sets up a corp. If sing K on behalf of corp in process of formation can avoid personal liability only if the promotoer shows that other party knew corp didnt yet exist and other party agreed to look solely to corp for performance once corp came into existence. But Ks before formation not automatically bound by K entered into by promotoer. Copr may adopt or radify actioons done on its behalf.
generally, if agent had authority, principle is liable to third party. Whether agent personally liable depends on whether agent was disclosed, undisclosed or partially disclosed. Agent gen not liable when K for disclosed principal, may be for breach of implied warranting in that when disclose warrants they they have authority to act. If no authority, then can breach it.
Proper issuance of shares
corp cannot issue more shares tahn number authorized by its articles. shares of stock can be issued in exchange for other things than money, like services to be performed. Shareholders buying shares at same time must pay same price.
Standard of conduct as officers?
same person can hold all the same offices if they want. have fiduciary duty to corp and shareholders to act in good faith, with due care, and in honest belief that actions are in best interest of corp. May remove officer at any time with or withotu cause. officers are agents and can perform duties outlined in bylaws.
Breach of fiduciary duties
loyalty and care requires director to act in a manner the director reasonably believes is in the best interests of the corp (no self dealing). Duty of care requies director act in good faith and with the care an ordinary prudent person would . BJR creates rebuttable presumption that directors act in conformity with fiduciary duties. If breach, liable to corp for breach
directors may act by unanimous written consent or at meetings. In a meeting, board acts by vote of majority present at the meetuing.
director who takes bis opp that came to director in his official capacicty adn that is in the corps line of biz may be held to hvae breached duty o floyalty to corp and required to hold the opp in trust for the corporation
Pierce the corporate veil?
showing that corp not adequately capitalized and corp formalities not adhered to.
Cts gen recognize the sep nature of a corp from its shareholders and will only reach to shareholders peraonlyl if corp form has been misused (shareholders using it as alter ego to sheild selves and failing to follow formalities) and peircing veil necessary to avoid unjust enrichment and perpetration of fraud.
Shareholders derivative suit
if corp fails to bring suit after a demand, shareholder can bring in name of corp to redress harm.
unless articles or bylaws say otherwise, no notice required for regular meeting of directors. However! special meetings of directors must get two days notice of date, time and place unless articles say other wise.
written notice required for both annual and special meetings. Notice must be at least 10 days, or 20 days for fundamental change, and no more than 60 days before meeting. Notice must include time, place, and date. Special meeting notices must include purpose.
Proper Issuance of Shares
Can't issue more than authorized in articles. Shares don't need to be represented by a certificate to be valid.
Shareholders have a right to inspect corp records during biz hours upon written notice of demand given at least 5 days before they wanna see it. Have right to inspect more records with proper purpose. Directors have right to inspect corporate docs relevant to their position as a director.
Neg acts of corp agent
corp liable for neg acts done in scope and course of agency. Person liable for own neg acts even if acting on behalf of corp.
Can board settle with third parties?
Still have fiduciary duties, and business judgment rule will apply.
Can board indemnify agents?
corp gen may indemnify officer or director for expenses incurred defending person in corp capacity.
sale of substantially all of corp assets
must be proprosed by board and approved by 2/3 of the shares entitled to vote. Shareholder vote on such sale requires notice within 20 to 60 days. Action at meeting with improper notice is invalid unless notice waived by attendance or in writing.
Shareholders dissenters rights
If object to fundamental corp change, entitled to dissent and get $ for fair market value of their shares plus interest
- WA biz corps act, although its default provisions only apply when articles or bylaws silent.
- Partnership act can also apply
Who is liable for officers acts?
officer = agent. Agnet with authority can bind principal to third party. If agency fully disclosed, agent won't be liable. Apparent authority exists when third party has no reason to know agent didnt have authority.
normally limited liability for corporations act and are not personally liable. Shareholder liability limited to amount of investment.
What would you like to do?
Home > Flashcards > Print Preview