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Certificate of Formation
must be prepared by organizers
delivered to the SOS
Certificate of Formation (required to include)(6 things)
(1) the corp's name, which must include the word "corporation," "company", or "incorporated" (or an abbreviation);
(2) the name and address of each organizer;
(3) if the corp is to have a BOD, the # of initial directors and the names and addresses of each initial director, or, if not, the names and addresses of those who will manage the corp;
(4) the street address of the registered office and the name of the registered agent at that office;
(5) the purpose for which the corp is formed, which may be a general stmt, such as "to engage in all lawful activity"; and
(6) the capital structure, which means the aggregate # of shares the co is authorized to issue, the # of shares per class, and info on the par value, voting rights, and preferences of each class of shares.
Legal Effect of Certificate of Formation
Certificate of Formation takes effect when the certificate is filed by the SOS
The SOS's filing of the certificate is conclusive proof that a de jure corp has been formed (considered to be an entity apart from its owners, ofcrs, directors) (generally its debts are its own; the owners, ofcrs, and directors are not liable for the corp's obligations).
Notice of Special Meeting
must state the time and place of the meeting
it need not state the purpose of the meeting,unless required by the by laws
under the TBOC, notice may be given by e-mail only if the director authorizes it.
Quorum (at a vote)
A quorum must be present for directors to take action.
Under the default rule, a majority of the directors is a quorum.
The TBOC requires that a quorum be present when a vote is taken; thus, a director may break a quorum by leaving and prevent the board from acting.
If no quorum, vote=invalid.
Dissent of Director (how is it recorded?)
IF a director of the board of directors wants his dissent recorded in the minutes, he must send a registered letter to the corporate secretary immediately after the meeting.
A directors who is present is presumed to concur with board action unless his dissent is duly recorded in the minutes.
If the directors is not present when the vote was taken, he would not be liable for any resulting damage from the action voted on.
Whether a deceased partner's surviving spouse has any rights in the partnership?
Surviving spouse=transferee of deceased partner's interest in partnership
On the death of the partner, the partner's surviving spouse or heir is a transferee of the partnership interest from the partners.
A transferee is entitled to receive distributions to which the partner would be entitled, but does not become a partner as a result of the transfer.
Management and Information Rights of a Transferee
The transferee of a partner's partnership interest does not have the right to participate in managing the partnership's business.
A transferee may make a reasonable inspection of the partnership's books, but only for a proper purpose.
Partner's Duties of Care and Loyalty
Duty of Care: requires a partner to use the care an ordinarily prudent person would exercise under similar circumstances.
Duty of Loyalty: requires a partner
(1) to account to the partnership for any benefit derived by her from the use of its property;
(2) to refrain from dealing with the partnership on behalf of a party having an interest adverse to the partnership; and
- (3) to refrain from competing or dealing with the partnership in a manner adverse to the partnership.
- >>>**Because partners=fiduciaries, almost any competition is prohibited.
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