BLW 2112 – Business Law II
Notes by Adam Felsenthal
4.Public corp.-government engaging in business (hospitals), public benefit.
5.Private corp.-typical for profit corporation, even traded publically.
6.Closely-held corporation-not traded publically, no IPO, NYSE, etc.-restrictions on
7.Non-profit corporations-no shareholders, instead, members, or subscribers.
8.PC-professional corporation-individual or group incorporates not in order to do
major business but in order to take advantage of benefits available only to
corporations, like doctors.
Not all can be PCs, some become LLPs, because of that.
10.S Corporation-limited liability but can be taxed like a partnership.
paperwork for S corporation as C corporation, just extra form you file, if they
approve, then can claim benefits of S, talui on IRS-federal, not states, like usual.-75
Start with venture capitalitsts-subscription agreement is contract.
Promoter has personal
liability for all of those preincorporation contracts, which means need lots of $, and
ask other to indemnify me for liability.
Send articles of incorporation to secretary of state, he approves it, sends Certificate of
Until secretary of state sends you that certificate, you are not, and have
no right to do business as, a corporation.
One good thing about them checking them is
that they don't engage in a substantive review, won't make phone calls to contact
people to make sure of accuracy.
Everyone affiliated with corporation has connection, but aren't the actual, corporatoin.
Corporation exists only on paper.
Day-to-day operation is contained in a separate
document called the by-laws.
By a partnership, it was about management-profits, etc.,
same thing here.
Name-reservation of name
Time frame-how long do you want the corporation to run for.Usually, perpetual.
Ultra vires-beyond the powers of.
When they find out its a ultra vires act, they'll sue the
director who engaged in the ultra vires act.
You should never have more issued shares than authorized shares.
Par value-Minimum $ amount that the shares should be transferred for.
If you put $50, if
nobody wants $50, you might have to sell at a discount, and create watered shares.
In practical terms, the corp is missing $ it really should have, shareholders kind of owe
Later, have creditors, shareholders might be liable.
Common-different classes, their features.
Registered office and registered agent, the secretary of state
Name of the incorporator-the person who signs the articles and sends them-no real
liability, major responsibility is to call what is known as the first organizational meeting.
At that meeting, one of the things that would occur is for the incorporator to transfer