Portfolio 2-3rd: The New York Corporation: Legal Aspects of Organization and Operation

I. Introduction
A. Statutes
B. Preincorporation Planning
C. Corporation Service Companies

II. Reasons for Incorporating in New York
A. New York Business Considerations
B. New York Tax Considerations

III. Steps in the Incorporation Process
A. Preincorporation Steps
1. Preincorporation agreements
2. Selection, clearance, and reservation of a corporate name
3. Securing of any preincorporation share subscriptions
4. Location of the office of the corporation
5. Drafting of the certificate of incorporation
a. Title; paper and backer; typing and riders
b. Required provisions in the certificate of incorporation
c. Optional provisions in the certificate of incorporation
(1). Valid only if in the certificate of incorporation
(2). Valid only if in the certificate of incorporation or a bylaw adopted by the shareholders
(3). Valid if in the certificate of incorporation or the bylaws
6. Pre-examination by the Department of State
7. Attachment to the certificate of incorporation of any required official consent or approval
8. Execution of the certificate of incorporation by each incorporator
9. Delivery of the certificate of incorporation to the Department of State
10. Filing and indexing by the Department of State of the certificate of incorporation
B. Postincorporation Steps
1. Beginning of corporate existence upon filing
2. Making, certifying, and transmitting by the Department of State of a `copy'; filing and indexing of such copy by the county clerk
3. Optional designation of a registered agent for service of process
4. Drafting of the bylaws
5. Drafting of the certificates representing securities
a. Bond certificates
b. Share certificates
(1). Required provisions
(2). Legends
6. Ordering of the corporation outfit (share certificate book and possibly transfer book, minute book(s), and corporate seal)
7. Organization meeting of the incorporator(s) or organization action by the incorporator(s) without a meeting
8. Organization meeting of the board of directors or organization action by the director(s) without a meeting
9. Organization meeting of the shareholders or organization action by the shareholders without a meeting
10. Execution of a shareholder agreement by the corporation
11. Qualifying shares or other securities for offer and sale when necessary under the federal securities and/or state Blue Sky Law
12. Payment of share subscriptions
13. Issuance of shares
14. Filing of a stock transfer tax certificate with the Tax Commission
15. Filing of an assumed name certificate in the office of the secretary of state
16. Designation of the chief executive officer
17. Other noncorporate law steps

IV. Corporate Finance
A. Capital Structure
B. Bonds
C. Shares 21
1. Authorized shares
a. Par value; without par value
b. Basic rights
c. Designations
d. Preferences
e. Other relative rights and limitations
f. Preferred shares issuable in series
g. Redemption
h. Conversion
2. Share subscriptions
3. Consideration and payment for shares
4. Stated capital
5. Share options
6. Fractions of share; scrip
7. Distributions
a. Cash or property dividends
b. Share distributions
c. Liquidating distributions
8. Redemption and reacquisition of shares
9. Reduction of stated capital
D. Disclosure Requirements

V. Shareholders’ Functions: Powers, Rights, and Liabilities
A. Management Role
1. Voting rights
a. Election and removal of directors
b. Election and removal of officers
c. Proxies
2. Actions
a. Meetings
b. Action without a meeting
B. Dividend Rights
C. Liquidation Rights
D. Classes and Series of Shares
E. Preemptive Rights
F. Inspection Rights
G. Derivative Actions
H. Duties and Liabilities
1. Liability for wages
2. Liability for watered shares
3. Liability when the actions of the directors are governed by a certificate of incorporation provision
4. Other liabilities
I. Right to Receive Payment for Shares (Appraisal Remedy)

VI. Directors’ Functions: Powers, Rights, and Liabilities
A. Management Role
1. Meetings
2. Action without a meeting
3. Committees
B. Duties and Liabilities
C. Indemnification 58
D. Liability Insurance

VII. Officers’ Functions: Powers, Rights, and Liabilities

VIII. Provisions Relevant to Close Corporations

IX. Amendments and Changes to the Certificate of Incorporation
A. Amendments
B. Changes
C. Restated Certificate of Incorporation

X. Mergers, Consolidations, and Dispositions of Assets
A. Mergers
1. In general
2. Parent and subsidiary mergers
3. Mergers of domestic and foreign corporations
4. Appraisal remedy
B. Consolidations
1. In general
2. Consolidations with or into foreign corporations
3. Appraisal remedy
C. Dispositions of Substantially All the Assets
1. Not made in the usual or regular course of business
2. Made in the usual or regular course of business
3. Appraisal remedy
D. Guarantees
E. Share Exchanges
1. In general
2. Share exchange with a subsidiary
3. Appraisal remedy
4. Effect of a share exchange
F. Requirements for Certain Business Combinations

XI. Dissolution
A. Nonjudicial (Voluntary) Dissolution
B. Judicial (Involuntary) Dissolution

XII. Receivership

XIII. Doing Business As a Foreign Corporation

XIV. Tender Offer Statute

XV. Service of Process Against the Corporation
A. Service Against Domestic Corporations
B. Service Against Foreign Corporations
1. Authorized foreign corporations
2. Unauthorized foreign corporations
C. Venue
D. Appearance by the Corporation