Notes- Chapter 38

Notes- Chapter 38 - Chapter 38- Corporation- Formation and...

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Chapter 38- Corporation- Formation and Financing A corporation is an artificial being that is neither tangible nor visible. It only exists in law. Each state has its own corporate law. The Modern Business Corporation Act (MBCA) is a form of corporation law that has been influential in the codification of state corporation statutes. The Nature and Classification of Corporations Corporate Personnel - Shareholders can sue the corporation. The corporation can also sue the shareholder - Sometimes a shareholder can sue on behalf of a corporation The Limited Liability of Shareholders - Shareholders not liable Corporate Taxation - One of the disadvantages is double taxation. (Dividends taxed when given, and then taxed again for the individuals who receive them) - Corporations can retain or pass their profits to shareholders in the form of dividends. o Retained Earnings o Offshore low-tax jurisdictions Holding company - a company whose business is just to hold shares in another company Holding companies typically located in low-tax offshore locations Constitutional Rights of Corporations - Recognized as a “person” under state and federal law - Has constitutional rights Torts and Criminal Acts - Liable for torts committed by its agents or officers within the course and scope of their employment - Corporations cannot be imprisoned, but they can be fined. Corporate Sentencing Guidelines - White collar crimes crimes that are committed by corporate employees - Corporate directors have a fiduciary duty to prevent employee misconduct, which means they have to report that an employee committed a crime if they discover it
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This note was uploaded on 11/18/2010 for the course MGMT 108 taught by Professor Guerin during the Spring '08 term at UCLA.

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Notes- Chapter 38 - Chapter 38- Corporation- Formation and...

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