Business Law: Understanding Corporations and Agency - Prof. Horace Johns, Study notes of Business and Labour Law

Download Business Law: Understanding Corporations and Agency - Prof. Horace Johns and more Study notes Business and Labour Law in PDF only on Docsity! BLAW Ch. 18 1) What is required to be a professional corporation? – A corporation is a legal entity created and recognized by state law. This business entity can have one or more owners and it operates under a name distinct from the names of its owners. 2) Do companies have a perpetual existence in most states? – Yes, because of their registration they have a perpetual existence in most states. 3) What is the most important function of the first organization meeting? – Creating the Bylaws. 4) What is a defecto corporation? – A de facto corporation is one that is recognized based on 1) A statue exists under which the corporation can be validly incorporated. 2) The parties have made a good faith attempt to comply with the statue. 3) The parties have already undertaken to do business as a corporation. 5) What are the implied powers of a company necessary for? – These powers are assumed powers within a corporation that may not clearly be listed in the Bylaws. 6) What body governs a company? – Board of Directors, elected by shareholders, are the governing body. 7) How is the board of directors elected? – The Board of Directors are chosen in the bylaws and serve at least a one year term then are nominated and voted on by shareholders. 8) What is the right to participate? – This states that “All board members have the right to be notified of all meetings in regard to the corporation and have the right to participate in those meetings.” 9) What is a quorum? The number of people required to be present before a meeting can conduct business. 10) Can the board of directors delegate some of its functions to its officers? – Yes, under the Duty of Care board members are expected to pass down tasks to the officers, who will then distribute those tasks to be completed. 11) What is the business judgment rule? – A corporate director or officer will not be liable to the corporation or to its shareholders for honest mistakes of judgment or bad decisions. 12) From what source do the payments of dividends come from? – A dividend is a distribution of corporate profits or income ordered by the directors and paid to the shareholders in proportion to their respective shares. 13) Is a company created by state law or federal law? – A corporation is authorized by state law. 14) What is a non-profit organization? – A non-profit organization is one whose main goal is to gain a profit but to create income for a certain objective. 15) What is an S-corporation? – A designated corporation that can avoid imposition of income taxes at the corporate level while retaining many of the advantages of a corporation. 16) What is a close corporation? – A closely held corporation is a corporation whose shares are not publically traded. 17) What are some of the items likely to appear in the articles of corporation? – The Articles of Incorporation will include name, number of shares issued, address of corporation, and address of incorporator. 18) When are the bylaws usually adopted? – The Bylaws are generally adopted in the first organizational meeting. 19) What is De Jure Existence? – States that the secretary of state’s filing of the articles of incorporation is conclusive proof that all mandatory statue provisions have been met. 20) When would “Pierce the Corporate Veil” likely be allowed? – When a party is tricked or misled into dealings. When a corporation is too thinly capitalized. A corporation is formed to evade an existing legal obligation. When statutory corporate filings are not followed. When personal and corporate interest are comingled. 21) Which body is responsible for the policy decisions of a company? – The Board of Directors will manage all policy decisions. 22) Recognize a director’s breach of loyalty. (2) – Duty of loyalty is defined as faithfulness to one’s obligations or duties. 23) Are agreements among shareholders to devote their shares in a certain manner valid and enforceable? - Yes, this is known as a proxy. 24) What might cause a court to order the directors to declare dividends? – If the shareholders request a review under failure to declare dividend and the criteria are met. BLAW Ch. 19 1) What is the key factor in determining whether someone is an employee? – How much control does the employer exercise over the detail of the work. 2) What is agency by agreement? – An expressed or implied agreement that the agent will act for the principal and that the principal agrees to have the agent so act. 3) Recognize an employer’s duty of cooperation to an employee. – compensation, cooperation, reimbursement, and safe working conditions. 4) What is Right of Identification? -