Chapters 39 40 Part Bx - First Meeting of Shareholders 1.Adopt Bylaws{establish structure of corporation stocks 2.Shareholders appoint directors

Chapters 39 40 Part Bx - First Meeting of Shareholders...

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First Meeting of Shareholders1.Adopt Bylaws {establish structure of corporation & stocks}2.Shareholders appoint directors.3.Directors appoint officers.4.Novation of pre-incorporation contracts from promoters to corporation.5.Transfer subscription agreements to shares of stock.
DirectorsDirectors govern the corporation by making policy.Agency: individual directors are not agents of corporation; but the board as a whole is a “super-agent” that binds the corporation.Bylaws establish the number of directors & their responsibilities.Appointed/reappointed at the Annual Meeting of the Shareholders. Directors can be removed for cause. Establishes procedure if director dies or resigns or a new position created.Directors may or may not be compensated.
DirectorsMust meet at least once a year in a formal meeting following Roberts Rules.One Director = One Vote.There must be a Quorumto conduct official business. A quorum is the minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.Directors have the right to:Participate in major corporate decisions through meetings.Inspect corporate books and records.Duty to make informed decisions.
OfficersOfficers are hired by the Board of Directors {Qualifications are set in the bylaws}. Manage the day-to-day affairs of the corporation. Officers are agentsof the corporation – can bind the corporation to contracts.One person can hold more than one office and be both an officer and a director.
Directors & Officers are FiduciariesDuty of Care:Duty to act in good faith.Duty to make informed decisions. Duty to exercise reasonable supervision when delegating work.Duty of Loyalty: Directors and officers must subordinatetheir self-interest to the interest of the corporation. They may not:Compete with the corporation.Usurpa corporate opportunity.
Fiduciary DutiesStill, an Officer or Director may benefit from her position if1.Duty to disclose potential conflicts of interest.2.May not vote on transactions that may personally benefit the director/officer.3.Transaction can still be approved by other disinterested directors4.The transaction is fair & reasonable.Not to use information that is not public to make a profit trading securities.

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