Corporations
When approaching a Corporations exam, it's crucial to identify the particular corporate structure involved and the relevant statutory and common law. Focus on articulating the duties of corporate officers and directors and the rights of shareholders.
A corporation is formed when the Articles of Incorporation are filed with the state.
The business judgment rule applies to decisions made by the board of directors.
Limited liability protects shareholders from personal liability for corporate debts.
Directors owe fiduciary duties of care and loyalty to the corporation.
Shareholders have the right to vote on major corporate decisions.
Conflicts of interest must be disclosed and must not harm the corporation.
Shareholders have the right to receive dividends when declared.
Appraisal rights entitle dissenting shareholders to a fair value buyout in certain mergers.
Majority shareholders owe fiduciary duties to minority shareholders.
A merger requires approval from the board and shareholders of both corporations.
The duty of care requires that directors act with informed judgment in the interest of the corporation.
Appraisal rights may be available under certain circumstances.
Directors and officers must act in good faith and in the best interests of the corporation.
Self-dealing transactions must be fair to the corporation to be enforceable.
The business judgment rule protects directors’ decisions if made with due care.
Securities must be registered unless exempt under SEC regulations.
Disclosure obligations must be met to avoid liability for misstatements.
Preferred stock generally provides fixed dividends and priority over common stock.
A corporation may voluntarily dissolve with shareholder consent.
The winding up process involves settling debts and distributing remaining assets.
Creditors must be paid before shareholders during liquidation.
Courts may pierce the corporate veil if there is unity of interest and ownership.
To pierce the veil, there must be a showing that not doing so would promote injustice.
Ignoring the formalities of corporate governance can lead to personal liability.
Structure your answer by identifying issues, applying relevant rules, and providing analysis that ties facts to conclusions. Use IRAC (Issue, Rule, Application, Conclusion) as a guiding framework.
Allocate approximately one-third of your time for planning and outlining your answers and the remaining two-thirds for writing. Ensure to leave a few minutes for review.