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Chapter 38 CORPORATIONS— Formation and Financing See Separate Lecture Outline System I NTRODUCTION A corporation exists only by statute.  Generally, corporations exist only under state law, which can differ from state to state.  The Model Business Corporation Act (MBCA), first published in 1946 and revised every few years, is a codification of corporation law that has influenced the codification of corporation statutes in many states.  Today, the majority of state statutes are versions of a recent major revision of the MBCA, which is re - ferred to as the Revised Model Business Corporation Act (RMBCA). This chapter gives your students a detailed introduction to the corporate form.  Among the topics in the chapter are the nature of the corporation, the classifications of corporations, the requirements for forming a cor- poration, and the items that are usually included in the articles of incorporation.  The powers that may be exer- cised by a corporation, as well as the situations in which the corporate veil may be pierced, are touched on briefly.   An outline of the financial foundation of the corporate form of doing business completes the chapter. 235
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236           INSTRUCTOR’S MANUAL TO ACCOMPANY  BUSINESS LAW , ELEVENTH EDITION A DDITIONAL  R ESOURCES A UDIO  & V IDEO  S UPPLEMENTS The following  audio and video supplements  relate to topics discussed in this chapter— PowerPoint Slides To highlight some of this chapter’s key points, you might use the Lecture Review PowerPoint slides compiled for Chapter 38. C HAPTER  O UTLINE I. The Nature and Classification of Corporations A. C ORPORATE  P ERSONNEL Corporate officers and employees run the daily operations of a corporation and answer to the board; directors manage the firm; shareholders elect the directors.  A shareholder can sue the corporation, and the corporation can sue a shareholder.  Under certain circumstances, a shareholder can sue on behalf of a corporation. A DDITIONAL  B ACKGROUND Early Forms of Corporations Although corporations play a central role in the global economic system, the corporate entity itself is a relatively recent invention.  The shareholder form of business organization developed in Europe at the end of the seventeenth century.  These so-called joint stock companies frequently collapsed because their organizers  absconded  with  the  funds  or  proved   to  be  incompetent.     Municipalities  were   the  most common corporations in the eighteenth century.  Although several business corporations were formed after the Revolutionary War, it was not until the nineteenth century that the corporation came into common use for private business.  In 1811 the state of New York passed a general incorporation law
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