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Business Law Newsletters

An Introduction to Corporations

Various structures are available for a business. A business may be set up, owned and run as a sole proprietorship, a partnership (limited or general) or a corporation (regular, Subchapter S or limited liability).

Continuity of Existence in Choosing a Form of Business Organization

Continuity of existence is an important factor in choosing the structure of a business. The value of a business when viewed as a continuing or “going” concern is likely to be considered higher than the same business if it is being dissolved and its value is being distributed.

Investment Manager Reports to Be Filed with the Securities and Exchange Commission

Institutional investment managers must report to the Securities and Exchange Commission on Form 13F those securities registered under Section 13(f) of the Securities Act of 1933 over which the investment managers exercise discretion.

Registration of a Public Offering with the Securities and Exchange Commission

A company that decides to sell its stock to the public must file a registration statement with the Securities and Exchange Commission. The registration statement is made public as it is filed. However, the company may not sell its securities described in the registration statement until staff of the Commission has declared that the registration statement is effective.

Ultra Vires Acts

In most states, the duty of obedience is recognized as one of the three fiduciary duties a director owes to the corporation. One component of the duty of obedience is that a director is prohibited from committing an ultra vires act. Ultra vires, translated from the Latin, means “beyond powers.” An ultra vires act is beyond the scope of the powers bestowed on the corporation (and the director) by the corporate charter or bylaws. Thus, a director commits an ultra vires act when he acts without or beyond the authority vested in him by the corporation.