WVU BCOR 320 - Chapter 20 (4 pages)

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Chapter 20

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Chapter 20


Lecture number:
Lecture Note
West Virginia University
Bcor 320 - Legal Environment of Business

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BCOR 320 1nd Edition Lecture 37 Chapter 20 Corporations Promoter s liability before the corporation is formed Promoter Someone who organizes a corporation Personally liable on any contracts he signs before the corporation is formed After it is formed a corporation can adopt the contract Adopt Agree to be bound by the terms of a contract Promoter can get off the hook if the other party agrees to a novation Novation A new contract with different parties Incorporation process Where to incorporate Domestic corporation a company in the state where it incorporates Foreign corporation A corporation formed in another state Companies generally incorporate either in The state where they most of their business Delaware Offers several advantages Laws that favor management An efficient court system The charter Defines the corporation including Name of corporation Address and registered agent Incorporator Person who signs the charter and delivers it to the Secretary of State Purpose Stock These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Stock The charter must provide three items of information about the company s stock Par value Number of shares Authorized and unissued Stock that has been authorized but not yet sold Authorized and issued Stock that has been authorized and sold Treasury stock Stock that a company has sold but later bought back Classes and series Class Categories into which stock can be divided Series Classes that are further divided into subcategories Preferred stock The owners have preference on dividends and in liquidation Cumulative preferred stock Non cumulative preferred stock Participating preferred stock After incorporation Directors and officers A corporation is required to have at least one director unless All shareholders sign an agreement that eliminates the board The corporation has 50 or fewer shareholders Written consent Through which shareholders

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