The Great State of Delaware
This statute states that legally, the board of directors runs the corporation/business
What is § 141?
Name the 4 presumptions shareholders must overcome when applying the Business Judgment Rule
What is: 1) a direction who made a decision that is 2) disinterested, 3) informed, and 4) made in good faith
True or false: The Entire Fairness Test is an elements test.
What is false?
What does LLC stand for?
What is: limited liability company
List what has to be in the ARTICLES OF INCORPORATION:
What is:
Name/address/registered agent of corporation
Classes of Stock/Number of Shares/Characteristics of each Class
Name and Addresses of Initial Directors
Shareholder Voting Procedure
True or False: A bylaw is invalid if it is inconsistent with Delaware law
What is true?
True or False: Standard of care and standard of liability for the Duty of Care are the same
What is false?
Standard of care: Ordinary care
Standard of liability: Business Judgment Rule
What is the rule for the Duty of Loyalty?
What is: Corporation’s interests must come before director’s personal interests
What is: a joint venture is just narrower in scope.
What prevents hostile takeovers?
What is a staggered board?
True or False: Delaware has two hurdles to dismiss derivative litigation
What is false?
2 requirements + dismissal by special litigation committee
This test gets applied to determine if a fiduciary took a corporate opportunity
What is the Broz Test?
True or false: 102(b)(7) limits liability for duty of loyalty, if it is in the articles of incorporation
What is false
Only limits for duty of care (if included in AOI)
True or false: in a General Partnership, each partner gets an equal vote, regardless of what amount of capital they put in
What is true
What is the difference between common stock and preferred stock?
What is:
Common stock votes, but preferred usually doesn't
Preferred has a fixed dividend, whereas common gets whatever is leftover
This is applied to every K in Delaware, even when sophisticated parties have created the K.
What is the Implied Duty of Good Faith and Fair Dealing?
What is: the waste test or rationality test gets applied
What case covers what a punctilio duty is?
What is: Meinhard v Salmon
Define "flow-through taxation"
What is: when the income is taxed only at the owner's individual tax rate for ordinary income; the business itself pays no corporate tax.
What is the difference between straight voting and cumulative voting?
What is:
Straight voting - each shareholder votes one time for each board seat
Cumulative voting - you can put all your votes towards one person, if you want
This statute does not apply to controlling shareholders in a Duty of Loyalty claim
What is § 144?
If one of the 4 presumptions is met, then what happens?
What is: Entire Fairness Test applies?
True or false: A parent corporation must pass the intrinsic fairness test only when its transactions with its subsidiary constitute self-dealing.
What is true?
(Sinclair)
What are the 3 professions that can be an LLP?
What is: attorney, architect, and accountant
True or false: Majority of shares (votes) can fire directors with or without cause
What is: true