Based on Professor Kaufman's lecture for Ca Bar
Are liable until novation and are fiduciaries.
Irrevocable for 6 months period.
- Authorized shares
Not liable unless pierced veil
Par Value, Issuance
Minimum Issuance Price
Preemptive Rights, Issuance
Maintain ownership percentage
1. Duty to manage
2. Business Judgment Rule
3. Fiduciaries = care/prudence, unless articles limit + loyalty, no unfair benefits unless disclosure & independent ratification
Derivative Suits, Shareholder Rights
1. Contemporaneous ownership
Voting, Shareholder Rights
Only the record date owner votes
Proxies, Shareholder Rights
Revocable unless 1) labeled, 2) coupled with interest.
Quorum Shareholder Rights
Majority of all shares, all shares. NOT shareholders.
Vote Shareholder Rights
Votes cast in favor exceed votes cast against.
Cumulative Voting, Shareholder Rights
Shares times slots.
Dividends, Shareholder Rights
Discretionary unless insolvency. 1) common pay last, 2) preferred pay first, 3) participating pay again, again, 4) cumulative add-up, add-up, add-up.
Eliminating Formalities, Closely Held Corporations
1) Unanimous election + 2) share transfer restriction = no piercing + possible S corp status.
Professional Corporation, PC
Just 1 profession + limited liability
1. Board resolves
2. Special notice
3. Majority of all shares
4. dissenters rights
5. notice to state
Section 10(b), Securities Laws
Scienter + deception + actual buying or selling stock
Section 16(b), Securities Laws
no trading profits with in 6 months. none.
Sarbanes Oxley Act, SOA, Securities Laws
no knowingly false filings + no benefits during falsehoods or black out periods