Portfolio No. 94, The Florida Corporation: Legal Aspects of Organization and Operation, discusses the legal considerations in organizing and operating a corporation under Florida law. The portfolio discusses the major areas of corporate practice, including formation, capitalization, reorganization, and dissolution of the corporation. The portfolio also devotes significant attention to the powers, rights, and liabilities of shareholders, directors, and officers. Issues involving foreign corporations doing business in Florida are discussed as well.
Portfolio No. 94: The Florida Corporation: Legal Aspects of Organization and Operation
I. Introduction A. The Law Governing Florida Business Corporations B. Reasons for Incorporating in FloridaII. The Process of Incorporation and Formation A. Requirements for Incorporator(s) B. Liability Related to Corporate Acts in Absence of Incorporation C. Preparing and Filing the Articles of Incorporation 1. Content a. Mandatory provisions b. Optional provisions 2. Execution 3. Filing requirements 4. Correcting errors in the articles of incorporation or other documents D. Choosing a Corporate Name E. Reserving the Corporate Name F. Establishing and Maintaining a Registered Office and Registered Agent 1. Changing the registered office or the registered agent 2. Resignation of the registered agent G. Appointing/Electing Directors H. Holding the Organizational Meeting I. Adopting the Bylaws J. Appointing Officers K. Subscription Agreements to Buy Shares L. Issuing Shares of Stock 1. In general 2. Preparing share certificates a. Requirements b. Restrictions on transfer c. Non-certificated shares M. Consideration N. Other Early-Stage Corporate Acts O. Regularly Required Corporate Formalities 1. The annual report 2. Holding an annual meeting of shareholders 3. Required state taxes P. Amending the Articles of Incorporation 1. Amendment before issuance of shares 2. Amendment by the corporation when shareholder approval is not required 3. Amendment by the corporation when shareholder approval is required 4. Procedure for amendment by board of directors and shareholders 5. Filing articles of amendmentIII. Corporate Finance A. Capital Structure 1. Authorized capital a. Par value or no par value b. Common shares c. Preferred shares 2. Issuance of shares a. Partly paid shares b. Fractional shares c. Liability for shares issued before payment 3. Consideration 4. Surplus 5. Share options 6. Subscription agreements a. Revocability b. Default 7. Federal and state securities laws a. In general b. Restrictions on transfer 8. Repurchasing sharesIV. Shareholders' Functions: Powers, Rights, and Liabilities A. The Shareholders' Meeting 1. Annual meeting 2. Special meeting 3. Notice 4. Attendance via remote communication 5. Scheduling meetings 6. Record date 7. Record holders 8. Quorum 9. Voting process a. Votes b. Cumulative voting c. Votes required d. Proxies e. Voting groups 10. Election of directors 11. Filling of board vacancies 12. Removal of directors 13. Action by consent B. Shareholder Liability 1. Fiduciary duty 2. Subscriptions for shares 3. Disregard for the corporate entity a. Alter ego doctrine b. Thin capitalization 4. Deep rock doctrine/equitable subordination 5. Sale of control 6. Subsidiary corporations C. Shareholders' Right to Inspect Corporate Books and Records D. Voting Trusts E. Shareholders' Agreements F. Dividend Rights 1. Cash or property distributions 2. Share distributions G. Liquidation Rights H. Preemptive Rights I. Classes and Series of Shares of Capital Stock 1. Common shares 2. Preferred shares a. Straight preferred b. Participating preferred c. Convertible preferred d. Cumulative preferred e. Noncumulative preferred f. Callable or redeemable preferred g. Liquidation preference J. Appraisal Rights 1. When shareholders have the right to appraisal 2. Exemptions 3. Asserting appraisal rights 4. Offer K. Shareholder Derivative SuitsV. Directors' Functions: Powers, Rights, and Liabilities A. Management, Delegation, and Supervision B. Meetings 1. Time and place 2. Notice 3. Quorum 4. Action 5. Action without a meeting 6. Assent C. Executive Committee D. Committees E. Legal Standards 1. Duty of care 2. Duty of loyalty – interested transactions 3. Corporate opportunities 4. Inequitable purpose and corporate waste 5. Statutory liabilities a. Distributions b. Federal securities laws 6. Liability to shareholders 7. Liability to creditors and others 8. Dismissal of derivative litigation 9. Board responses to hostile takeovers and selling the company F. Dividends and Distributions G. Redemptions and Repurchases H. Indemnification I. Liability Insurance J. Recommendations of DirectorsVI. Officers' Functions: Powers, Rights, and Liabilities A. Duties of Officers B. Legal Standards C. Liability 1. In general 2. Under the Sarbanes-Oxley Act of 2002 D. Removal E. CompensationVII. Mergers, Dispositions of Assets, and Conversions A. Mergers and Share Exchanges 1. In general 2. Procedure a. Directors' role b. Shareholder approval c. Plan of merger or plan of share exchange; preparing and filing articles of merger or share exchange 3. Short-form mergers 4. Merger of parent and subsidiary a. When shareholder approval is required b. Freeze-outs 5. Merger or share exchange with foreign corporation 6. Shareholder appraisal rights 7. Effect of merger or share exchange a. In general b. Rights of creditors 8. De facto merger doctrine B. Disposition of Assets 1. In general 2. Procedure 3. Shareholder appraisal rights 4. Rights of creditors 5. De facto merger doctrine C. Conversions 1. In general 2. Procedure 3. Effect of conversionVIII. Dissolution A. Voluntary Dissolution 1. Procedure 2. Judicial supervision 3. Preparing and filing articles of dissolution B. Involuntary Dissolution and Liquidation C. Other Dissolution Mechanisms D. Liability of Directors and Shareholders E. Claims Against the Corporation F. What Happens After Dissolution?IX. The Florida Affiliated Transactions and Control-Share Acquisitions Statutes A. Florida's Affiliated Transactions Statute 1. ‘Affiliated transactions’ defined 2. Shareholder approval of affiliated transactions 3. General exemptions to the shareholder approval requirement 4. The ‘fair price’ exemption 5. Situations in which the affiliated transactions statute does not apply B. Florida's Control-Share Acquisitions Statute 1. ‘Control-share acquisition’ defined 2. Transactions that do not constitute control-share acquisitions 3. Acquiring person statements 4. Shareholders' meeting 5. RedemptionX. Foreign Corporations A. Foreign Corporations Must Obtain a Certificate of Authority B. Consequences for Failure to Obtain a Certificate of Authority C. Process of Obtaining a Certificate of Authority to Transact Business in Florida 1. Content of application and name requirements 2. Filing requirements 3. Amendment D. Registered Office and Agent 1. Change of a foreign corporation's registered office or registered agent 2. Resignation of a foreign corporation's registered agent E. Annual Report Required for Foreign Corporations F. Withdrawal of a Foreign Corporation G. State's Power to Revoke Authority of a Foreign Corporation 1. Grounds and procedure for revocation of authority to transact business in Florida 2. Reinstatement and judicial appeal from revocationXI. Service of Process on a Corporation in the State of Florida A. Introduction B. Effectuating Service of Process
Practice ToolsPractice Tool 1 Sample Articles of Incorporation for a Florida CorporationPractice Tool 2 Sample Certificate of Acceptance By Registered AgentPractice Tool 3 Sample Blank Check Preferred Provision—Articles of IncorporationPractice Tool 4 Sample Articles of Amendment—Designation of Preferred StockPractice Tool 5 Sample BylawsPractice Tool 6 Sample Incorporator's MinutesPractice Tool 7 Sample Board of Directors Organizational Action By ConsentPractice Tool 8 Sample Consent Resolution for Cash Dividend Declaration