corporation slides 11

corporation slides 11 - ANNOUNCEMENTS l Reading for next...

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ANNOUNCEMENTS l Reading for next class: Text at 996-1003 l Revised Model Business Corporation Act Entire statute as an “external link” Edited statute under “course documents” l First assignment out next Monday Due Feb. 24 – note revised due date l No cell phones, please
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Corporations l Formation l Financial transactions stock distributions l Management directors officers Shareholders l Mergers and termination (most likely will not get to this)
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Nature of a Corporation l A creature of statute Delaware General Corporation Law New York Business Corporation Law [Revised] Model Business Corporation Act Sarbanes-Oxley Act of 2002 l Constitutional issues Corporations are “persons” Corporations are not “citizens” Citizens United v. Federal Election Comm’n (2010) l See Hertz Corp. v. Friend (2010)
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Corporate Purposes and Powers l Corporate purpose See RMBCA 3.01 l Sources of corporate powers Statutory powers l See RMBCA 3.02 Articles of Incorporation Implied powers
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Ultra vires act l Beyond the purposes and/or powers of a corporation l Cannot be alleged in a suit by a third party l Corporate act can be challenged on these grounds only: shareholder suit against the corporation action by attorney general suit by corporation against the party (like an ex-director) responsible for the act l See , Case 38-1
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Articles of Incorporation l corporate name l number and type of authorized shares l location of corporate headquarters l designated agent for service of process l name and address of each incorporator
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Liability of Promoters l Pre-incorporation contracts l promoters individually liable l corporation not liable
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Post-incorporation liability l corporation adopts contract l promoter remains liable unless creditor and corporation agree otherwise l , Case 38-2, text at 989
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Corporate By-laws l supplemental to articles of incorporation l changed/amended by directors l always binding on shareholders l binding on third parties with actual knowledge
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Corporation by estoppel l Representation by enterprise that it is a corporation l Reasonable reliance on that representation by third party l Fair or equitable behavior by party asserting estoppel l Remember Boslow Family Limited Partnership
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Legal Issues in Corporate Finance l Types of stock and ownership rights l Acquiring and transferring stock l Types of corporate distributions and the right to receive distributions
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Rights of Stock Ownership l Receive dividends if/when declared l Right to vote unless excluded l Participate in distribution at time of liquidation
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Types of Shares l Authorized Provided for in the Articles of Incorporation l Issued Sold by the corporation l Treasury Repurchase by the corporation [no right to vote] Eliminated by RMBCA l Outstanding Issued shares minus treasury shares
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l Common l Preferred dividend preference
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This note was uploaded on 02/24/2011 for the course BLAW 3210 taught by Professor Grossman during the Spring '11 term at Cornell.

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corporation slides 11 - ANNOUNCEMENTS l Reading for next...

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