HOME

Business Organizations



Previous Outline

Next Outline

 

 

Outline

  • Process of incorporation 
    •  how - filing of articles
      • minimum requirements
      • optional terms
    •  where - Delaware or not? 
    •  what law - internal affairs rule
  •  Adaptability of corporation 
    • change business purposes / direction       change to non-business purpose 
    • change management structure
  •  Lawyer's professional responsiblities
    • Who is client? participants, corporation? 
      • dual representation
      • disqualification in subsequent settings
    • revelation of information between parties 

Daily Thoughts

Are you a professional?

1.  How do you put a giraffe into a  refrigerator? Open the refrigerator, put in the  giraffe and close the door. [This question tests whether you  tend to do simple things in an overly complicated way.]

2. How do you  put an elephant into a refrigerator?  Do not open the  refrigerator, put in the elephant and close the refrigerator.  Instead, open the refrigerator, take out the giraffe, put in  the elephant and close the door.  [This tests your ability to think  through the repercussions of your actions.]

3. The Lion King is  hosting an animal conference. All the animals attend except one. Which  animal does not attend? The Elephant, which is in the refrigerator.  [This tests your memory.]

4. There is a river you must cross. But it is inhabited by  crocodiles.  How do you manage it? You swim  across.  All the Crocodiles are attending the Animal Meeting.  [This  tests whether you learn quickly from your mistakes.]

According to Andersen  Consulting Worldwide, around 90% of the professionals they tested got  all questions wrong. But many preschoolers got several correct  answers. Anderson Consulting says this disproves the theory that  most professionals have the  brains of a four year  old.

Problems

PinMakers, Inc. (incorporated in Delaware) runs a pin-making business in North Carolina.  After some good years, times become lean for PinMakers.  The business is insolvent, unable to pay debts as they come due. Bank creditors of PinMakers sue the company's shareholders, claiming they siphoned excessive dividends.

Party A (creditors)  Argue that North Carolina law applies to “piercing the corporate veil,” under regular contract choice of law principles.

Party A (shareholders) Argue that Delaware law applies to piercing the veil, under regular corporate choice of law principles.  What is the speed of dark?

Readings