Business Forms-

1
Business Forms-
2
Legal Ramifications of Selecting a Business Form

• Creation
• Control
• Liability
• Termination

3
Sole Proprietorship

• Advantages

• Disadvantages

4
Partnership

• Two or more parties own the business and bear
  joint and several liability for the business

5
Partnership - Special Issues

• Joint Ventures
• Limited Partnerships

6
Corporations

• Separate legal entity that is covered under the
  corporate veil

7
The Corporate Form

• Shareholders Owners
• Board of Directors Run the
  Big Picture
• Officers/ Managers Run the
  Daily Operations
• Note Board and Officers are Agents of the
  Shareholders

8
The Incorporation Process

• Select a name and an agent for service of process
• File a Certificate of Incorporation
• Adopt Bylaws
• Specify your initial Board
• Obtain resignation of incorporators
• Hold first directors meeting
• gives you the CORPORATE VEIL

9
Where do you Incorporate?

• More than 50 of corporations are in Delaware
• cumulative voting
• staggered boards
• limited liability for directors
• high taxes

10
Flaws in the Incorporation Process

• De Jure Corporation
• De Facto Corporation
• Corporation by Estoppel
• gives you the corporate veil even if you have a
  flaw

11
Piercing the Corporate Veil

• Alter Ego Theory
• Undercapitalization

12
Types of Corporations

• Closely Held
• Privately Held
• Publicly Held

13
Management of the Corporation

• Directors - Corporate powers are expressed by or
  under the authority of the Board
• inside directors
• outside directors

14
Duties of Directors

• Fiduciary Duties
• duty of care
• duty of loyalty

15
Duties of Directors

• Duty of Care-
• Business Judgment Rule
• Disinterested Decisions
• Informed Decisions
• Reasonable Supervision

16
Duties of Directors

• Duty of Loyalty
• Corporate Opportunities -

17
Duties of Directors

• Translate to certain essential duties
• authorizing major corporate actions
• advise and counsel management
• effectively audit
• review investments
• monitor managements performance

18
How do Directors Protect Themselves?

• D O Coverage
• Personal coverage
• Corporate Reimbursement

19
Corporations
20
Special Issues

• S Corps
• LLCs