Questions tagged [corporate-law]

The body of law about corporations, including mergers, acquisitions, corporate governance, corporate liability, finance, and bankruptcy. The fact that a question involves a corporation does not make it a corporate law question.

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1answer
33 views

Appraisal Rights in Chapter 11?

Assuming some number of shareholders believe that the bankruptcy process is inadequately compensating them (i.e. by setting the company valuation too low and thus giving creditors too much equity in a ...
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568 views

Why is a company allowed to change the number of shares it’s divided into after its IPO?

I read that even after an IPO, a company can change the number of shares that it’s divided into based on a board vote. What’s to prevent them from arbitrarily increasing the number of shares to raise ...
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By what mechanism does a parent company control its subsidiary?

Company B is a fully-owned subsidiary of Company A, a huge international conglomerate. All the employees of Company B are in the orgchart of Company A, all under Company B's CEO. That CEO's boss is a ...
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29 views

Can I use the name of an out-of-business company for my project?

There was a business with a name I want to use for my business but it is out-of-business. Do I have the right to use a name of an out-of-business company? I am in Israel but my business is ...
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21 views

When creditors come for assets in an LLC formed in another state, which state laws apply?

I am heavily indebted.I also want to start a business. I want to protect my assets from creditors. If I put my personal assets into my business, will they be protected? From what I understand, Wyoming ...
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66 views

Does dissolving your LLC imply it was a sham company and therefore confer liability to you as the sole member?

I've done work for a former startup client in another state (AZ) for a few years and that work has come to an end. All that contracting work was done under my LLC (in DE) specifically created for that ...
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1answer
23 views

May there exist a non-voting board of directors member in the United States?

May there exist a non-voting board of directors member in the United States? Or by definition are the board of directors all voting?
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31 views

Is there any limit on how much bonuses can be given before filing for bankruptcy in the United States?

I read on https://www.cnn.com/2020/05/26/investing/hertz-bankruptcy-executive-bonuses/index.html (mirror): Hertz paid out millions of dollars in bonuses to its executives just before its bankruptcy ...
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17 views

What approaches can comply with SOX code review requirements?

I am working with a client, which has a bunch of services under SOX compliance. They currently have a code-review policy that looks like so: A reviewer must accept the last commit on a pull ...
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36 views

Can a company be both an airplane manufacturer and an airline?

It may be advantageous for a company that manufactures its own aircraft to also be an airline. For example, the airline business would likely have reduced maintenance and parts costs relative to other ...
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1answer
92 views

How is a corporate person, a person?

Law with respect to the human person, rests on intention, or a neglect of intention. A corporate person, has no access to intention - it is only human persons, behind the veil of the corporate person,...
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112 views

If I buy assets (inc customer data) from receiver of a UK company, how does GDPR apply?

I’m considering buying the assets of an insolvent company that has gone into administration / receivership. Included in the assets is a customer database. How does GDPR apply? is the purchasing ...
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45 views

How do plaintiffs get emails relating to companies they are suing?

For example in the case of IBM getting sued over age discrimination, the plaintiff somehow got emails showing that upper management instructed his director manager not to transfer him but to fire him. ...
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3answers
134 views

How exactly is founder stock created?

Suppose that I found a C corporation, Superlative Widgets Inc., within the U.S. I would like to both fund the corporation and issue myself 100,000 shares in a way that avoids or minimizes my personal ...
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75 views

Individual vs. corportate liability for inherently dangerous activities

These days a lot of people make their living on YouTube, doing inherently dangerous things and filming them. For instance, there's those people who climb up unfinished skyscapers without any safety ...
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1answer
38 views

Dating corporate banking resolution

I've started a US / California corporation for my company and have almost instantly come up to an issue I do not know how to address. In order to open a Bank account, the board (just me) has to agree ...
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1answer
72 views

Can a contract signed as an act of submission rather than consent be considered invalid?

Please consider the following situation: A (USA) company makes an offer to a (UK) individual. The company purchases an inbound ticket for the individual. The individual arrives. The individual ...
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2answers
90 views

Can a US Company be sued for failing to honour equity component of offer of engagement?

In the following scenario, does the individual have a legal case against the company? And if so, what law specifically can be applied? Summary A company offers x% equity. The individual engages. The ...
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88 views

Is it legal to crowdfund the cash prize that would be payed to the winner of a 1-on-1 sporting event?

I am personally planning to build a donation-based crowdfunding sporting (like chess, shogi, go, etc.) website . I would like to know if it is legal to gather donation from the users then pay the ...
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1answer
27 views

Do nonqualified stock options need term limits to be exempt from deferred compensation (409A) treatment?

Suppose that I want to build a startup with independent contractors and want to compensate them with non-qualified stock options (NSOs). I expect the business to take some time to stabilize and ...
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1answer
25 views

Is the fiduciary relationship built upon shareholder interest or will?

Under corporate law, fiduciaries (such as directors or executives) have a duty to act in the best interest of a firm's shareholders. This usually takes the form of increasing share value or the payout ...
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42 views

Law regarding associations around the world [closed]

In Sweden there is something called law of association/association law (associationsrätt). An association (that is the word used in Swedish too) in this context is any cooperation between people. It ...
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3answers
94 views

Why do large companies make legal battles public?

It would seem big companies try to keep litigation private and confidential. I guess this is so they can save face and it would like bad for business regardless of the outcome of the court may be. Is ...
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1answer
47 views

Can the same entity be a B Corp and an LLC, or an S-Corp and a C-Corp?

Fellow Lawfolk, In the United States, can a business file to be any one of the three combinations: LLC & B-Corp S-Corp & B-Corp C-Corp & B-Corp As in: Can you simultaneously be ...
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1answer
89 views

What is the legal principle which requires Apple to pay the Irish State €13 billion?

In 2016, the EU ruled that the Irish State provided state aid to Apple, which was deemed to be illegal. As a result of this, Apple are required to back-pay €13 billion to the Irish exchequer. From a ...
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67 views

If an American LLC buys something, do these expenses reduce their profits?

Imagine an American LLC which buys some commodity (e. g. gold) for every dollar that it owns (after taxes). At the end of the year, the company has 0 dollars in the bank (because all money was spent ...
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1answer
56 views

Liability from conflict of interest

There are two co-owners, A and B, of a federal corporation C in Canada. B has a side job at a Canadian company D which has a non-compete clause in the contract. C and D do in fact compete. If a legal ...
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3answers
117 views

Can a founder 'gift' pre-existing assets to a company after hiring a cofounder?

I live in the U.S. Suppose that I create a company with a deposit of $10,000 and want to bring in a cofounder for an equity stake of 15% in this company. I have personal assets like computer code, ...
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2answers
130 views

What happens to loans issued by a startup if the startup fails?

I live in the U.S. Suppose that I invest $50,000 in a startup company, signing "typical" paperwork for a 55% stake. The founder then uses the money to issue a $20,000 loan at a minimal interest rate ...
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1answer
51 views

Legal status of corporate nondiscrimination policies

I work for an organization that has a standard nondiscrimination policy. They state that they are an Equal Opportunity Employer and list about 20 protected classes on the basis of which they ban ...
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76 views

If you are the sole owner of an LLC and you sign a non-compete on behalf of the LLC are you bound to the non-compete or is the LLC bound?

I want to set up a business entity where I (CEO &/or sole owner) can sign non-competes on behalf of my business and not be personally bound to the non-compete. What's the right legal business ...
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1answer
68 views

Buying a business in Germany

Therr is Person A with SoleTraderCompA and person B with no company. Person A wants to sell to B, B wants to buy. Both residents of Germany. How can this be processed? Transfer obligations etc. ...
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81 views

Starting a business: is it legal to hire freelancers if you haven't registered the company yet?

The reasons I would want to delay the registration of this business as much as I can are: I don't foresee having a single dollar of revenue until at least 2 years later (the product I'm building is ...
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54 views

Who is responsible for environmental clean up?

Suppose you bought a property that had serious environmental problems (lead, gasoline, etc.). An environmental authority calls you on it and orders you to clean it up. You bought the property ...
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2answers
39 views

Hold Harmless-Want on half of LLC and NOT self

I recently applied to a position to teach yoga, as an independent contractor. I have formed an LLC, and now the gym would like me to sign a hold harmless agreement. I want to make sure the LLC is ...
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1answer
65 views

Is a stock power form the same as the stock purchase agreement?

From what I understand I need to complete the stock purchase agreement inoders to fully/legally own all shares in my company. I understand that I need to fill out some sort of form or create and sign ...
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141 views

Is it advisable for a person write his own contract if he is good in english but don't know legal jargon?

A lawyer scared me by saying, yes you can right your own contract but chances are most of your clauses won't hold in court cause you don't know legal jargon. However, I know english and my english is ...
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3k views

How to interpret or parse this confusing 'NOT' and 'AND' legal clause

In the following legal clause: They shall not confer the right to attend any meeting of members and to exercise one vote for every share held. Does the NOT negates both ANDs as in: They shall ...
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1answer
35 views

Who approves the creation of new shares in a Proprietary Limited Company?

I'm struggling to find a concrete answer for this. Who approves the creation of new shares in a Proprietary Limited Company? Is it the Board of Directors (through board resolution), or Shareholders (...
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39 views

What does 'The Company' refer to in this proprietary ltmited company constitution?

I'm trying to understand who has the right to issue new shares in my proprietary limited company (wherther through board or general resolution). I found the following clause in the constitution: ...
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1answer
6k views

What's the difference between a share and a stock?

In my company constitution I found the following: At any time, the directors may allot and issue unissued shares subject to clause 8, or grant options over unissued shares, on any condition and ...
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1answer
79 views

Can a private company board of directors issue new shares?

If so, wouldn't this be unfair against shareholders as this would devalue their shares and voting rights?
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1answer
248 views

Do I need to register for Foreign Qualification in my situation?

I am wondering if or where I need to register for Foreign Qualification: I incorporated a company as a C-corp in Delaware. I work day-to-day and have set the official HQ of the corporation in Maryland....
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1answer
659 views

What laws protect minority share holders from having their share rights changed by special resolution?

A special resolution done by majority share holders can simply change the rights of certain shares and make them useless. They can reduce the share's voting rights or reduce dividend payment.
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1answer
46 views

Where are Share Classes defined in an LLC?

Where are Share Classes defined in an LLC. For example, if I look at facebook's constitution at the link below, there are no definitions for share classes. I was thinking there would have been such a ...
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1answer
59 views

What legal measures do venture capitalists employ to protect their investment in a startup? [closed]

Worst case founders can just run away with the money. They can also kick the VC rep from the board since they own majority share.
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1answer
42 views

Does the law sets requirements for what can or cannot be inside a Company Constitution?

This is for the best interest of share holders. Say someone puts an outrageous statement in the constitution, such as making a clause that he's a permanent director on the board. This is a general ...
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1answer
36 views

Can a company director simply appoint another company director?

I found the following article in my company constitution: The directors of the company may appoint a person as a director of the company. The company must confirm such an appointment by ...
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1answer
5k views

What's the difference between Ordinary, Class A and Class B Shares?

I incorporated my company using an Online service. Not knowingly, I created class A, B and Ordinary shares during the incroporation. However, in the company constitution there are no mention of what ...
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53 views

As a startup founder, what reasonable bylaws are commonly setup to maintain control of the board? [closed]

As a startup founder, what reasonable bylaws are commonly setup to maintain control of the board? This is to prevent hostile take overs, transfer of assets and etc.

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