Key Terms
Director
Person appointed or elected to sit on a board that manages the corporation's business and supervises its officers.
Board of Directors
The collective body of directors.
Officers
Individuals responsible for daily operations. Titles include president, COO, CFO, controller.
Six core rights
Inspection, Meetings, Vote, Preemptive Rights, Derivative Suit, Dividends.
Quorum
Minimum number of shareholders (usually a majority) who must be present to take a vote. Defined by corporate bylaws or s
Proxy
A person authorized to vote on another shareholder's shares when that shareholder cannot attend in person.
Definition
Two or more corporations are dissolved and a new corporation is created from them.
Purpose
Prevents shareholders from using a corporation to accomplish what they could not do directly as individuals.
Most common use
Shareholders sue officers or directors for not acting in the corporation's best interest.
Requirements
1. Shareholder must have owned shares at the time of the alleged injury 2.
Key rule
Shareholders have a right to a dividend WHEN DECLARED. The board decides whether to declare one; they are not required t
Two components
Duty of Loyalty + Duty of Care.
Corporate Opportunity Doctrine
Prevents officers and directors from taking personal advantage of a business opportunity that rightfully belongs to the
Example
A state limits how many liquor licenses one person can hold. Forming multiple corporations to obtain extra licenses trig
Effect
The court strips the liability "veil" and treats shareholders or directors as personally liable, as if no corporation ex