CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS.
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Transcript of CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS.
![Page 1: CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS.](https://reader036.fdocuments.in/reader036/viewer/2022082517/56649f165503460f94c2bbe9/html5/thumbnails/1.jpg)
CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF
CORPORATIONS
![Page 2: CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS.](https://reader036.fdocuments.in/reader036/viewer/2022082517/56649f165503460f94c2bbe9/html5/thumbnails/2.jpg)
Learning Objectives:• Financial Features• Operational Features:
Shareholders Directors Liability of Officers and Directors
Chapter 31 2
CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF
CORPORATIONS
![Page 3: CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS.](https://reader036.fdocuments.in/reader036/viewer/2022082517/56649f165503460f94c2bbe9/html5/thumbnails/3.jpg)
1. Introductiona. Role of Bonds: Debtor/Creditor
Relationship
b. Role of Stocks: Equity Relationship
c. Types of Stock:i. Common
ii. Preferred
d. Par vs. No-Par Stock
e. Treasury Stock
Chapter 31 3
FINANCIAL FEATURES
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2. Stock Subscriptions: pre-incorporation agreement to purchase shares.
3. Right to Transfer Stock:a. Generally: free transferability
b. Close Corporation: restrictions are proper.
4. Mechanics of Transfer
Chapter 31 4
FINANCIAL FEATURES
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1. Rights of Shareholdersa. To Inspect Records
b. To Participate in Meetings
c. To Vote
d. Preemptive Rights
2. Derivative Suitsa. Nature
b. Proper Use
Chapter 31 5
SHAREHOLDERS
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3. Right to Dividendsa. General Rule: Unfettered right of
directors to declare a dividend
b. Exceptions
4. Fiduciary Aspects: Within a Closely-Held Corporation
a. Duty of Majority to Minority
b. Rationale
Chapter 31 6
SHAREHOLDERS
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1. Powers
2. Meetings
3. Compensation
Chapter 31 7
DIRECTORS
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1. Generallya. Liability to Third Persons
b. Directors and Officers are Fiduciaries of the Corporation
2. Business Judgment Rulea. Nature of the Rule
b. Application
c. Situations Where the Rule Does Not Apply
Chapter 31 8
LIABILITY OF OFFICERS AND DIRECTORS
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3. Duty of Loyaltya. Generally
b. The Corporate Opportunity Doctrine
4. Duty of Carea. Obligation of Directors
b. Immunity of Directors
5. Indemnification and Insurance
Chapter 31 9
LIABILITY OF OFFICERS AND DIRECTORS
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CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF
CORPORATIONS