This is an extract of our Corporations Key Subjects document, which we sell as part of our Corporations Outlines collection written by the top tier of Oklahoma City University School Of Law students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Corporations Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:
1. Corporate Formation & Cert/Bylaw Amendments a. Cert of Incorporation The overriding and controlling document of corporation's governance Must be filed with the secretary of state Mandatory Inclusions: DE SS102(a) i. Name w/ special word or abrev. (corp or inc. etc) ii. Address of the offices, name of registered agent & address iii. Nature of business to be conducted iv.
# of shares authorized to issue & if they are common or preferred v. Name & address of incorporator Optional Provisions DE SS102(b) i. Management of company ii. Can give SH preemptive right to buy stock (get 1st chance to buy new stock, determined on your ownership %) iii. Something that requires a larger majority on certain votes iv. Something limiting time corporation exists (perpetual if don't list) v. If you are going to have cumulative voting vi. Provision that imposes personal liability on SHs vii. Provision that limits personal liability of directors (102(b)(7)) b. Bylaws DE SS109 Not generally made public Usually more detailed than cert of incorporation Doesn't have to be filed anywhere Its basically the internal rules that govern the corporation CERTIFICATE ALWAYS TRUMPS THE BYLAWS WHERE THEY CONFLICT, AND DECISIONS OF DIRECTORS ARE TRUMPED BY THE BYLAWS c. Amending the Documents i. Articles of Incorporation Amendments
* Must be initiated by the directors, and then sent to SHs for approval per SS242(b) ii. Bylaw Amendments
* SHs may propose amendments to the bylaws & by vote may amend the bylaws
* In the certificate this power may also be given to the Directors but doing so doesn't divest the SHs of the power also.
2. Voting a. Straight Voting
* Each SH gets to vote the # of his shares for each director.
* Here, if a person owns 51% of the outstanding shares he can get the entire board.
b. Cumulative Voting
* SX/(D + 1)
? S = the total # of shares actually voting (of all SHs)
? X= the # of directors you want to elect
? D= the # of directors to be elected So for example if there are 9 directors to be elected and there are 1000 shares voting, then to be able to get 3 directors: (1000)(3)/9+1=
3000/10=300 and so you would need 301 shares to elect 3 of the 9 directors. You can cast a total # of votes equal to the # of your shares multiplied by the # of positions to be filled and can spread these votes among as many candidates as there are seats to be filled or concentrated in as few as 1 candidate Example: if you own 2,000 shares and there are 9 directors to be elected then you get (2,000 x 9)= 18,000 votes
3. Registration & Exemption a. Transactions Covered
? If you sell a security then you have to register it with the securities commission
? Security= any instrument that might be sold as an investment, look for investing in something and relying on the efforts of others for profitYou must disclose the financial condition of the corporation, information about management & registrant, financial statements and basically"Material events & uncertainties which would cause reported financial info not to be necessarily indicative of future operating results or financial condition"
b. Exemptions There are basically 2 general exceptions to registration i.
SS4(2): Non-public offering
? Buyer has to have knowledge & experience in finance &
business to be able to evaluate risks
? Must have access to info that would have had if required register
? Can't resell or redistribute
? Can't solicit or advertise Use Reg D to see if 4(2) Applies: 504: Less than $1M
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