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CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS

Learn about the financial and operational aspects of corporations, including the role of bonds and stocks, rights of shareholders, duties and liabilities of officers and directors, and more.

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CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS

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  1. CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS

  2. CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS Learning Objectives: Financial Features Operational Features: Shareholders Directors Liability of Officers and Directors Chapter 31

  3. FINANCIAL FEATURES • Introduction • Role of Bonds: Debtor/Creditor Relationship • Role of Stocks: Equity Relationship • Types of Stock: • Common • Preferred • Par vs. No-Par Stock • Treasury Stock Chapter 31

  4. FINANCIAL FEATURES • Stock Subscriptions: pre-incorporation agreement to purchase shares. • Right to Transfer Stock: • Generally: free transferability • Close Corporation: restrictions are proper. • Mechanics of Transfer Chapter 31

  5. SHAREHOLDERS • Rights of Shareholders • To Inspect Records • To Participate in Meetings • To Vote • Preemptive Rights • Derivative Suits • Nature • Proper Use Chapter 31

  6. SHAREHOLDERS • Right to Dividends • General Rule: Unfettered right of directors to declare a dividend • Exceptions • Fiduciary Aspects: Within a Closely-Held Corporation • Duty of Majority to Minority • Rationale Chapter 31

  7. DIRECTORS • Powers • Meetings • Compensation Chapter 31

  8. LIABILITY OF OFFICERS AND DIRECTORS • Generally • Liability to Third Persons • Directors and Officers are Fiduciaries of the Corporation • Business Judgment Rule • Nature of the Rule • Application • Situations Where the Rule Does Not Apply Chapter 31

  9. LIABILITY OF OFFICERS AND DIRECTORS • Duty of Loyalty • Generally • The Corporate Opportunity Doctrine • Duty of Care • Obligation of Directors • Immunity of Directors • Indemnification and Insurance Chapter 31

  10. CHAPTER 31: FINANCIAL AND OPERATIONAL FEATURES OF CORPORATIONS

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