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Business Law Final Exam Chapter 25: Corporations: Nature, Formation and Powers “Ben is a person, Jerry is a person, Ben & Jerry’s is not a person.”Businesses are just a reflection of what the culture is of the corporation and if a couple of people act the way they act: Ben and Jerry’s: Are they good, bad or neutral? Glyphosate – used in roundup and that negatively impacts consumer’s in health. Beneath the threshold so therefore they that they’re okay. DelawareCorporations can: make K’s own property, sue, donate, act, etc. but they don’t die and they are nebulous. Reasons to form: liability protection, taxation, investments, aggregate resources. Entity choice: see (DE slides) and forming the entity. You can simply pick up the phone and get your questions answered. Liability Protection - $90 to create a business in Delaware in order to protect yourself. Corporation – protecting yourself for a mistake that the corp. committed. Piercing the Corporate Veil: F&M marketing v Christenbury Trucking Obliteration the liability protection if granted. Factors to consider: failure to collect paid-in capital, is business undercapitalized, non-issuance of stock certificates, sole ownership of stock by 1 person, addresses, lawyers, advisors, manipulation of assets and balance sheets. Proof of must show disregarding corporate entity is necessary for administration of justice. Control of company does not equal to commitment of fraud/ wrongdoing to pierce evil -> no piercing Only way to administer justice is to take away the assets.How do we form a corporation? Promoter / Organizer / Incorporator roleGo out soliciting investors for the business, A registered agent to receive your mailArticles of Incorporation – birth certificate of your businessBylaws – company constitution Shareholders- owners Board of directors- high level decision makers. Does not issue day to day judgments. Executive officers – daily decision makersFiduciary duties and Business Judgment Rule (BJR) and trust
Failure to perform the absolute moral minimum may cause violation of these laws and legal trouble. Documents are how tell that you have a business. Bylaws- (LLC) has operating agreement but it’s necessarily the same thing in great detail.