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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169 views

CEOs can't sell stock without risking imprisonment?

From what I understand if a CEO sells stock in their company and the stock price then goes down significantly within less than a year, they can get indicted for "insider trading" and face 5 to 10 ...
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41 views

Starting limited company in UK - different classes of shares

We are starting a limited (by shares) company with partner (in England). We wanted to model it in way that I have 70% of dividend and capital distribution rights and my partner 30%, but we both have ...
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334 views

Could leaking insider information eliminate insider trader concerns?

Suppose I possess some non-public information about Company X. I want to trade Company X's stock for reasons unrelated to the information (e.g. I believe the stock market as a whole is going to tank ...
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2answers
62 views

Can a plaintiff in a fiduciary breach of trust sue a particular director instead of the company?

I heard this story from Peter (not actual name): Peter co-founded a company with John. John earns 80% of shares while Peter owns 20% of shares. John being greedy empties all company coffers ...
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130 views

CEO wants to step down to a VP position - when should board be notified?

Suppose a startup has three directors on the board, two co-founders and the main investor. The CEO (one of the co-founders) wants to step down and take a VP position. The CEO has started to have ...
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1answer
91 views

Is it a myth that a single owner LLC protect the owner's personal assets?

I own 100% ownership of an LLC. I started this LLC because everyone gave me advice that if the company is sued, the banks won't go after my car, my house or etc. As I dig deeper into the legal ...
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3answers
93 views

Does the CEO of a company have any legal responsibility to act in the interests of its shareholders?

Does US law include anything that places a burden of responsibility on a company's CEO to act in the interests of its shareholders, even if the CEO owns a majority share in the company? Let's say, as ...
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1answer
28 views

Can a co-founder sue another co-founder from company constituitional infringements using courts of another country?

Say a company is incorporated in Dubai. All Shareholders live in Australia. A co-founder does something against the company constitution, such as diluting other co-founder shares. Can the other co-...
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36 views

Can a minor act as an officer or director of a corporation?

I have two questions: I was wondering if a minor could act as an officer of a corporation; and if a minor can act as a director on a board of directors in the Commonwealth of Massachusetts.
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1answer
39 views

Why was Judge Jacksons ruling in DoJ vs Microsoft overturned in the anti-trust hearing of 2001?

In United States vs Microsoft, a 2001 anti-trust case in which the DoJ, 18 states and the District of Columbia alleged that Microsoft had abused its monopoly position was heard by Judge Jackson and he ...
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69 views

English Football Club ownership

I have been wondering if club fans have the power to sanction the compulsory sale of the club by an owner whom they perceive as frustrating their club's future. In any case, the money comes from these ...
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59 views

Can a company change a policy and enforce it like this?

If an organization offers an online education policy as a perquisite (after being employed for a certain period) and the policy states that it's free for the employees if they opt-in and they'll have ...
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36 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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580 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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1answer
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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157 views

Can the owner of a limited liability company be penalized?

I'm wondering about the legal practice in different countries. If a person forms a limited liability company (LLC), and then completely abandons it, e.g. doesn't file taxes for the company etc., what ...
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1answer
38 views

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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1answer
32 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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1answer
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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1answer
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
223 views

Termination of the appointment of a non-executive Director

The majority of shareholders of Company incorporated in Cyprus, during an AGM, has elected a new non-executive Director to the Board. He then receives a letter of appointment materializing service ...
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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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1answer
24 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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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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19 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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922 views

Could the Intel CEO be accused of insider trading?

A few weeks back, the Intel CEO sold all the company shares he was allowed to. Yesterday, it was reported that a big security flaw existed in virtually all Intel processors sold in the last decade. ...
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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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122 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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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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1answer
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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76 views

Can LLCs be completely anonymous

I was under the impression that in every state, the creator of an LLC or INC must have at least one chief executive, and in some states, a treasurer and secretary. However, in some filings I've come ...
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119 views

Setting up and running a limited company (UK) remotely (EU)

I would like to ask what are the potential pitfalls of setting up and running a limited company from a different country. In particular, the company would be incorporated in the United Kingdom, and I ...
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2answers
131 views

Can a mail-forwarding service be used as the registered agent for an MN non-profit?

In order to incorporate a non-profit in Minnesota under statute 317A, the registered office and agent of the organization must be included in the Articles of Incorporation. Additionally, if the ...
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2answers
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
39 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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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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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
74 views

What is the company structure that will effectively limit liability to the parent company, and not any of it's subdivisions?

I'm exploring different kinds of corporate structures. I'm in a unique situation where I have a very specialized construction industry but can operate under the blanket term "General contracting". ...
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0answers
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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2answers
78 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
58 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
95 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
69 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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62 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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90 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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68 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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133 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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