Ba cass

• RTA 1.01


  Agent-Principal ABCs

  Principal manifests assent to agent's actions.

  1. On behalf of principal

  2. Under principal's control

  Agent manifests assent to the actions as well
• RTA 2.01


  Actual Authority

  P's manifestations to the agent suggest P wishes A to act

  Subject to A's reasonable belief
• RTA 2.03


  Apparent Authority

  P may be liable also if (1) a third party (2) reasonably believes that A is authorized to act on P's behalf, (3) traceable to manifestations by P
• RTA 8.01


  Agency duty of loyalty

  -- must act loyal to principal's benefit in all matter connected to the agency relationship
• Agency duty of loyalty


  -- No competing (can continue after employment ends)

  -- No communication of confidential information

  -- No acting as an adverse party in a transaction

  -- No acting against employer's interests (Food Lion)
• RUPA 202(a)


  Association of two or more persons to carry on as co-owners a business for profit forms a partnership (whether or not they intend to form)
• RUPA 202(c)(3)


  Receipt of profits raises a presumption of partnership

  Exception: rent, employee, loans
• RUPA 305


  Partner is liable for all loss/injury/penalties as a result of a wrongful act of omission of a partner in a general partnership:

  · (1) in the ordinary course of business; OR

  · (2) acting with actual or apparent authority
• RUPA 306(a)-(b)


  General Partnerships

  (a) All partners are jointly and severally liable for all obligations of the partnership, unless otherwise charged by the claimant or law

  (b) Default Exception: partners who join after the obligation has been incurred are not liable
• RUPA 306(c)


  Limited Liability Partnerships

  -- Any obligation of an LLP is solely the obligation of the partnership. Partners are not liable just because they are partners (only responsible for themselves)
• RUPA 401(h)


  Partners have equal rights in the management and conduct
• RUPA 401(k)

  Majority vote for most things

  Unanimous vote for extraordinary things
• RUPA409(b)


  Partnership Duty of Loyalty (may be limited but not eliminated)

  · Duties (not exhaustive)

  o Anti-theft

  o No self-dealing

  o No competing against the partnership
• RUPA409(c)


  Partnership Duty of Care (may be modified)

  Standard of review: gross negligence

  · Recklessness

  · Intentional misconduct

  · Knowing violations of law
• RUPA409(d)


  Duty of Good Faith and Fair Dealing (non-waivable, but can decide own measuring standards if not unreasonable)
• Meinhard (flipped scernario)


  If Meinhard (property developer/owner) got the offer, you could argue the offer was not an incident of the partnership. But Salmon would not have received the offer if not for his role in the partnership
• RUPA assumptions


  Partnerships are a distinct entity (this is debated), partnership property belongs to the entity,

  departure of a partner does not cause dissolution
• RULLCA 201(a)


  File certificate of formation with SoS (most file with DE)

  - Company name, mailing address, name and address of registered agent, and (fee)
• RULLCA 301(a)


  - Manager-Managed: members don't owe any duties just because they are members
• RULLCA 304(a)


  LLC members/managers are not personally liable for the obligations of the LLC (except direct liability or piercing)

  -- Bad bookkeeping is expected of LLCs
• RULLCA 407


  Default: member-managed

  If manager-managed, must be in charter

  Member-managed:

  -- one vote per member

  -- Majority for most things

  -- Unanimous for extraordinary things

  
  

  Manager-managed:

  -- Majority of managers for most things

  -- Unanimous vote of all members for extraordinary things
• RULLCA


  409-- Member-Managed: members owe fiduciary duties to the LLC and other members of the LLC

  -- Manager-Managed: managers owe fiduciary duties to the LLC and its members
• DELLCA 18-303


  LLC members/managers are not personally liable for the obligations of the LLC (except direct liability or piercing)
• Klang (surplus calculations)


  - no bad faith/fraud

  - acceptable data

  - reasonable methods

  - not too far off the mark
• DE parent piercing factors


  Gross undercapitalization

  Corporate formalities

  Non-payment of dividends

  Insolvency of debtor corp

  Siphoning

  Corporate records missing

  Façade
• Proxy statements must include

  Who

  How much cost

  Who paying

  When
• 14a-8(i)


  o (1) Improper under state law

  o (2) Implementation would cause violation of law

  o (3) Proposal violates proxy rules (ex. misleading)

  o (4) Redresses personal grievances only, special interest

  o (5) Relevance (regarding <5% of assets or net earnings)

  o (6) Corporation lacks power/authority to implement

  o (7) Ordinary management functions

  o (8) Director elections

  -- Would disqualify nominee standing for election

  -- Would remove director before end of term

  -- Questions competence, business judgement of specific nominee/director

  -- Seeks include specific person for election

  -- Anything else that would effect the outcome of the upcoming election

  o (9) Directly conflicts with company's own proposals

  o (10) Corporation already substantially implemented

  o (11) Duplication of proposal submitted by another SH

  o (12) Resubmissions of substantially the same issue as a proposal from the past 5 calendar years

  o (13) Relates to specific amount of cash/stock dividends
• DE Litigation Requirements


  Contemporaneous ownership

  Court must approve any settlement

  Standing requirement

  Demand Requirement
• DGCL 102(b)(7)


  After Van Gorkum liability, DE decided to allow clauses in charter that limits director liability for money damages for breach of duty of care

  -- NOT officers (only if solely directors)

  -- NOT breaches of loyalty/good faith
• DGCL 109(a)


  SH power to adopt, amend, repeal --> procedural

  In DE, bylaws may be amended only by SHs, unless charter says directors can also amend
• DGCL 141(a)


  o General Management Power

  -- Business and affairs managed by the board, except as may be provided in the charter

  -- Substantive power
• DGCL 141(k)


  Removal: SHs can remove with/without cause, UNLESS

  -- Staggered boards: only for cause unless charter specifies otherwise
• DGCL 144


  A conflicted transaction is NOT void or voidable if:

  -- Cleanse via informed shareholder ratification

  -- Cleanse via informed board or committee approval

  -- Challenged director proves entire fairness in court
• DGCL 216


  SH quorum: majority

  Most votes: majority

  Director elections: plurality
• DGCL 242(b)(1)


  To amend the corporate charter, directors adopt a resolution and the shareholders vote on it
• DGCL 365


  Public Benefit Corporations

  -- Board must manage corporation in a manner that balances the (1) SH interests, (2) interests of those effected by the corporation's actions, and (3) the specific public benefit identified in charter
• MBCA 7.28


  Most votes: majority

  Director elections: Plurality

  Straight voting is the default unless charter says they can change to cumulative voting
• MBCA 7.42


  MBCA Demand

  Plaintiff must bring demand to the board. If board is silent for 90 days, plaintiff can bring suit
• MBCA 8.30(b)


  Duty of Care (MBCA)

  Directors and officers must be informed with the reasonable care that a person in a like position would reasonably believe appropriate under the circumstances

  
  

  "Informed" -- sufficient familiarity to make an informed judgement
• MBCA 8.61


  A conflicted transaction is NOT void or voidable if:

  -- Cleanse via informed shareholder ratification

  -- Cleanse via informed board or committee approval

  -- Challenged director proves entire fairness in court