Understanding Corporations: Attributes, Classification, Formation, and Liability - Prof. M, Study notes of Business and Labour Law

Download Understanding Corporations: Attributes, Classification, Formation, and Liability - Prof. M and more Study notes Business and Labour Law in PDF only on Docsity! CH. 34 – CORPORATIONS Corporation: creature of the state, formed by substantial compliance w/ state law CORPORATE ATTRIBUTES: Legal entity– separate and apart from SH’s with entirely distinct rights & liabilities Limited Liability – limited to amount invested by SH Free Transferability of shares – can easily be bought and sold Perpetual existence – unless charter says otherwise, can last forever Centralized management – SH elect BOD (manage/policy), who appoints officers (run day to day affairs) CLASSIFICATION OF CORPORATIONS: Public – created to administer a unit of local civil government or created by the US to conduct public business Private – private individuals create it and it has no governmental duties Profit – founded for purpose of operating a business for profit Non-profit – any profits made are used exclusively for charitable, education, or scientific purposes for which it was formed Domestic – in the state in which it was incorporated Foreign – not doing business in the state where it was incorporated; must have a certificate of authority to do business in those states Publicly held – corporation whose shares are owned by a large number of people and are widely traded Closely held – owned by few shareholders and whose shares are not actively traded. SH are usually active in management and control of business Subchapter S – corporation has elected to be taxed as a partnership under IRS Code Professional Corporation – corporate from under which duly licensed individuals may practice their profession