A corporation is a legal entity
created through the laws of its state of incorporation. Individual states h=
ave
the power to promulgate laws relating to the creation, organization and
dissolution of corporations. Many states follow the Model Business Corporat=
ion
Act. (See Minnesota's adopti=
on (http://www.revisor.leg.state.mn.us/stats/302=
A/).)
State corporation laws require articles of incorporation to document the
corporation's creation and to provide provisions regarding the management of
internal affairs. Most state corporation statutes also operate under the
assumption that each corporation will adopt bylaws to define the rights and
obligations of officers, persons and groups within its structure. States al=
so
have registration laws requiring corporations that incorporate in other sta=
tes
to request permission to do in-state business.
There has also been a significant
component of Federal corporations law since Cong=
ress
passed the Securities Act of =
1933 (http://www.law.cornell.edu/uscode/15/ch2A.ht=
ml),
which regulates how corporate securities are issued an=
dsold.
Federal securities law also governs requirements of fiduciary conduct such =
as
requiring corporations to make full disclosures to shareholders and investo=
rs.
The law treats a corporation as a
legal "person" that has standing to sue and be sued, distinct from
its stockholders. The legal independence of a corporation prevents sharehol=
ders
from being personally liable for corporate debts. It also allows stockholde=
rs
to sue the corporation through a derivative suit and makes ownership in the
company (shares) easily transferable. The legal "person" status of
corporations gives the business perpetual life; deaths of officials or
stockholders do not alter the corporation's structure.
Corporations are taxable entities
that fall under a different scheme from individuals. Although corporations =
have
a "double tax" problem --both corporate profits and shareholder
dividends are taxed -- corporate profits are taxed at a lower rate than rat=
es for
individuals.
Corporate law has important
intersections with contracts and commercial
transactions (http://www.law.cornell=
.edu/topics/topic2.html#commercial%20transactions)
law.
Includes forms, articles,
entity comparison charts, and contact information for Secretary of States and Tax and Revenue
Departments for various states.
How should an investor recruit
an independent slate of director nominees? A dissident director is also a director who is representing
the shareholders, as opposed to doing just whatever the company's management wants done.
Private Placements on the
World Wide Web? How can you post a private placement circular on the World Wide Web without violating
Regulation D's prohibition on general solicitation? It just might be possible.... Check out Spring
Street Redux.
What's the best way to handle
hostile situations at board meetings or shareholder meetings? The author runs through the case law that
applies to such issues as-as "seconds" required for motions? What about the right decorum? Can that be
controlled?
Going Public? Information on
the typical services offered by vendors such as stock transfer agents, banknote companies, escrow
agents and even financial printers.
Valuing a company is hardly a
precise science and can vary depending on the type of business and the reason for coming up with a
valuation. There are a wide range of factors that go into the process -- from the book value to a host
of tangible and intangible elements. This article gives a basic overview of the various methods of
determining the value of a business.
The author gives guidance to
lawyers on the subject of how taking the Fifth differs in civil cases. How can invoking it be used
against someone? Lawyers should understand the limits on its use and how to neutralize its effects.
Delaware offers flexible
entities to do business. But is Delaware different from other states when it comes to limited liability
companies? Yes. The author spells out Delaware's approach.
There is
a trend emerging of indictments of lawyers in insurance, health care, securities and banking cases.
Transactional lawyers, especially, are being investigated. The authors tell how the government goes
about proving its cases.
Now that you've determined
that incorporating is the best organizational structure for your business, how do you go about it?
Where should you incorporate? How do you choose a corporate name? Here are a guide and some
instructions to forming a corporation.
There are a number of steps to
incorporating your business. Once you've completed those steps, you may be breathing a sigh of relief
that you've met the legal requirements of forming a business. On the contrary, there are a number of
legal formalities that must be conducted after a business is incorporated in order to operate within
the law. Here is a guide to those requirements.
There are many legal issues
that must be considered when choosing a domain name for your business Web site. Read on for a guide to
choosing a domain name in the global community of e-commerce.
There are a number of legal
structures from which to choose that offer differing management, tax and liability options.
Understanding the pros and cons of each business structure will help you select the right organization
for you.
seems the reformers are not
finished with the corporate boardroom. This time the issue is executive compensation, propelled to the
front lines by the scandal over former New York Stock Exchange Chairman Richard Grasso's $188 million
compensation package. The Grasso pay flap is the latest in a series of events causing corporate
directors to wonder if they too could be blamed for how they go about paying company executives.
