Vocab
A provision that relieves personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall NOT eliminate or limit the liability of a director
what is a Rain Coat / exculpatory provision
what is a regular/general partnership
Baatz v. Arrow listed six factors for peirving the veil. What are the six factors?
what are:
(1) undercaptialization
(2) fraudulent representation by corporation directors
(3) failure to observe corporate formalities
(4) abensce of corporate records
(5) payment by the corporation of individual obligations
(6) use of the corporation to promote fraud, injustice, or iillegalities
what is it when a shareholder claims that assets they contributed to a corporation are still assets fo the shareholder
what is reverse piercing
The default rule on the assignment of member's ownership interest in a Missouri LLC is that...
what is the assignee automatically becomes a member in the LLC
347.115/113
Descriptive, non-technical term that generally means a corporation that (a) has a relatively small number of shareholders and (b) does not have regular trading of its shares on a stock exchange or other established market mechanism.
What is a closely held corporation
On shielding the owners from personal liability for liabilities of the organization, which is better a Missouri LLC or a Missouri Limited Liability Partnership?
what is: LLC b/c all members and managers are covered from vicarious liability and doesn't have express exceptions on its face, and doesn't have to be renewed annually.
LLP covers all partners but has som exceptions and does have to be renewed annually.
In McQuade v. Stoneham (New York Giants baseball team case about a shareholders’ agreement) the court ruled
what is: that if allowing shareholders of the corporation to directly appoint the corporation's officer would violate public policy.
A business entity with partnership tax status has what kind of taxation?
what is pass through taxation
The dissolution of a Missouri regular/general partnership occurs only when
what is: any cessation of membership causes dissolution. 358.290
358.310
One or more shareholders bring suit on behalf of corporation where allegedly directly injured party is corporation.
What is Derivative Action
what entity does not automatiically have to wind up and termiinate following an event of its dissolution?
Summers v. Dooley (hiring of a trash collection) and National Biscuit Co v. Stroud (grocery store buying bread) cases were principally decided on what theory
what is rules regarding actual agency
domestic eligible enttity with two or more owners will be given what default tax classification?
what is partnership tax status unless it elected to be treated as corporation
what is the default rule in the Missouri Partnership statutes, the partners in a limited liability partnership (LLP) have what rights
what is the riight to partiicpate in management and conduct of the partnership's business
A right of existing shareholders to purchase newly issued stock before its offered to the public. Meant to protect current shareholders from dilution in value or control.
What are preemptive rights
what owner in what entity does not have the power to withdraw as such unless the agreement among owners provides such a power?
359.341
In Kessler v. Antinora (joint venture to build and sell a house) the appellate court held that the Service partner (Antinora) was NOT personally liable to pay for a share of the venture's loss because....
what is: the partners had failed to reach an agreement on how to share partnership losses leading the court to interpret and decide. The court interpreted the overall agreement to provide that Kessler could recover his capital invested only out of proceeds of the house sale, and not by requiring Antinora to contribute cash.
what precludes an entity from validly electing S Corporation tax status?
what is:
(1) having more than 100 shareholders
(2) having a for-profit limited partnership as a shareholder
(3) having two classes of stock that differ in terms of distribution rights
Under the Missouri LLC act, what leads automatically to winding up and termination?
A principal whose identity and agency relationship are not known to a third party. Thus, the third party dealing with the agent does not know that the agent is acting for someone else.
What is an undisclosed principal
what entity has both an insolvency test and a balance sheet test?
what is a Missouri LLC
Roberston v. Levy: using the ___________ corporation standard as a bright line test to resolve a promoter liability was accepted by the courts.
what is de jure corporation standard
number of shares needed to elect the number of directors times number of shares voting over total number of directors to be elected in the election plus 1 then all that plus one.
what is: may not be voluntarily or involuntarily transferred unless opt out in articles of incorporation.