Law of Corporations and Other Business Organizations

829 Pages·2009·16.47 MB·English

by  Angela Schneeman

THE
LAW OF CORPORATIONS
OTHER BUSINESS
AND
ORGANIZATIONS
Fifth Edition
DELMAR CENGAGE Learning
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Accounting and Financials for the Law Office • Administrative Law • Alternative Dispute Resolution • Bankruptcy
Business Organizations/Corporations • Careers and Employment • Civil Litigation and Procedure • CLA Exam
Preparation • Computer Applications in the Law Office • Constitutional Law • Contract Law • Court Reporting
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THE
LAW OF CORPORATIONS
OTHER BUSINESS
AND
ORGANIZATIONS
Fifth Edition
Angela Schneeman
The Law of Corporations and Other © 2010, 2007, 2002, 1997, 1993 Delmar, Cengage Learning
Business Organizations, Fifth Edition
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Printed in United States of America
1 2 3 4 5 X 13 12 11 10 09
Dedication
To my husband, Greg,
and our children,
Alex and Katherine
This page intentionally left blank
Brief Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XXIX
CHAPTER 2 Sole Proprietorships . . . . 29
Table of Cases . . . . . . . . . . . . . . . . . . . . . . XXXIV
Introduction . . . . . . . . . . . . . . . . . . . . . . . XXXV
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 29
§ 2.1 SOLE PROPRIETORSHIP
CHAPTER 1 Introduction to Agency and
DEFINED . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Business Organizations . . . . . . . . . . . 1
§ 2.2 SOLE PROPRIETORSHIPS
IN THE UNITED STATES . . . . . . . . . . . . . 30
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 1
§ 2.3 ADVANTAGES OF DOING
§ 1.1 AGENCY CONCEPTS AND BUSINESS AS A SOLE PROPRIETOR . . . . 31
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
§ 2.4 DISADVANTAGES OF DOING
§ 1.2 AGENCY CREATION . . . . . . . . . . . . . 6 BUSINESS AS A SOLE PROPRIETOR . . . . 34
§ 1.3 AGENCY RELATIONSHIP . . . . . . . . . 9 § 2.5 OPERATION OF THE SOLE
§ 1.4 PRINCIPAL’S LIABILITY TO PROPRIETORSHIP . . . . . . . . . . . . . . . . . . . 36
THIRD PARTIES . . . . . . . . . . . . . . . . . . . . . 15 § 2.6 THE PARALEGAL’S ROLE . . . . . . . 42
§ 1.5 AGENT’S LIABILITY TO § 2.7 RESOURCES . . . . . . . . . . . . . . . . . . . . 45
THIRD PARTIES . . . . . . . . . . . . . . . . . . . . . 17
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
§ 1.6 AGENCY TERMINATION . . . . . . . . 18
§ 1.7 AGENCY AND BUSINESS CHAPTER 3 General Partnerships . . . . 52
ORGANIZATIONS . . . . . . . . . . . . . . . . . . . . 20
§ 1.8 THE PARALEGAL’S ROLE . . . . . . . 22 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 52
§ 1.9 RESOURCES . . . . . . . . . . . . . . . . . . . . 25 § 3.1 AN INTRODUCTION TO
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 GENERAL PARTNERSHIPS . . . . . . . . . . . 53
§ 3.2 THE RELATIONSHIP BETWEEN
PARTNERS AND OTHERS . . . . . . . . . . . . . 59
vii
viii THE LAW OF CORPORATIONS AND OTHER BUSINESS ORGANIZATIONS
§ 3.3 THE RELATIONSHIP AMONG § 4.6 CHANGES IN THE LIMITED
PARTNERS AND BETWEEN PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . 136
PARTNERS AND THE PARTNERSHIP . . . . 66
§ 4.7 FINANCIAL STRUCTURE
§ 3.4 ADVANTAGES OF DOING OF A LIMITED PARTNERSHIP . . . . . . . 137
BUSINESS AS A GENERAL
§ 4.8 LIMITED PARTNERSHIP
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . 72
DISSOLUTION, WINDING UP,
§ 3.5 DISADVANTAGES OF DOING AND TERMINATION . . . . . . . . . . . . . . . . 138
BUSINESS AS A GENERAL
§ 4.9 DERIVATIVE ACTIONS . . . . . . . . . 143
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . 75
§ 4.10 FAMILY LIMITED
§ 3.6 ORGANIZATION AND
PARTNERSHIPS . . . . . . . . . . . . . . . . . . . . . 143
MANAGEMENT OF A GENERAL
§ 4.11 THE PARALEGAL’S ROLE . . . . . 144
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . 78
§ 4.12 RESOURCES . . . . . . . . . . . . . . . . . . 148
§ 3.7 FINANCIAL STRUCTURE
OF A GENERAL PARTNERSHIP . . . . . . . 89 SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 153
§ 3.8 DISSOLUTION, DISSOCIATION,
WINDING UP, AND TERMINATION
CHAPTER 5 Limited Liability
OF THE GENERAL PARTNERSHIP . . . . 91
Partnerships and Limited Liability
§ 3.9 OTHER TYPES OF
Limited Partnerships . . . . . . . . . . . 157
PARTNERSHIPS . . . . . . . . . . . . . . . . . . . . . . 98
§ 3.10 THE PARALEGAL’S ROLE . . . . . 100
INTRODUCTION . . . . . . . . . . . . . . . . . . . . 157
§ 3.11 RESOURCES . . . . . . . . . . . . . . . . . . 105
§ 5.1 INTRODUCTION TO
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 109
LIMITED LIABILITY
PARTNERSHIPS . . . . . . . . . . . . . . . . . . . . . 158
CHAPTER 4 Limited Partnerships . . . 113
§ 5.2 LIMITATIONS ON
PERSONAL LIABILITY . . . . . . . . . . . . . . . 160
INTRODUCTION . . . . . . . . . . . . . . . . . . . . 113
§ 5.3 LIMITED LIABILITY
§ 4.1 AN INTRODUCTION TO PARTNERSHIP FORMATION
LIMITED PARTNERSHIPS . . . . . . . . . . . 114 AND OPERATION . . . . . . . . . . . . . . . . . . . 166
§ 4.2 PARTNERS’ RIGHTS AND § 5.4 ADVANTAGES AND
RESPONSIBILITIES . . . . . . . . . . . . . . . . . 117 DISADVANTAGES OF DOING
BUSINESS AS A LIMITED
§ 4.3 ADVANTAGES OF DOING
LIABILITY PARTNERSHIP . . . . . . . . . . . 171
BUSINESS AS A LIMITED
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . 120 § 5.5 INTRODUCTION TO
LIMITED LIABILITY LIMITED
§ 4.4 DISADVANTAGES OF
PARTNERSHIPS . . . . . . . . . . . . . . . . . . . . . 176
DOING BUSINESS AS A LIMITED
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . 124 § 5.6 GENERAL PARTNER
LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 179
§ 4.5 ORGANIZATION AND
MANAGEMENT OF A LIMITED § 5.7 LIMITED PARTNER
PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . 126 LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 179
BRIEF CONTENTS ix
§ 5.8 LIMITED LIABILITY LIMITED § 6.11 LIMITED LIABILITY COMPANY
PARTNERSHIP FORMATION AND DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . 222
OPERATION . . . . . . . . . . . . . . . . . . . . . . . . 180
§ 6.12 TRANSACTING BUSINESS
§ 5.9 ADVANTAGES AND AS A FOREIGN LIMITED
DISADVANTAGES OF DOING LIABILITY COMPANY . . . . . . . . . . . . . . . 224
BUSINESS AS A LIMITED LIABILITY
§ 6.13 THE PARALEGAL’S ROLE . . . . . 231
LIMITED PARTNERSHIP . . . . . . . . . . . . 183
§ 6.14 RESOURCES . . . . . . . . . . . . . . . . . . 235
§ 5.10 THE PARALEGAL’S ROLE . . . . . 183
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 241
§ 5.11 RESOURCES . . . . . . . . . . . . . . . . . . 188
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 190
CHAPTER 7 Corporations . . . . . . . . . 245
CHAPTER 6 Limited Liability
INTRODUCTION . . . . . . . . . . . . . . . . . . . . 245
Companies . . . . . . . . . . . . . . . . . . 193
§ 7.1 AN INTRODUCTION TO
CORPORATIONS . . . . . . . . . . . . . . . . . . . . 246
§ 6.1 AN INTRODUCTION TO
§ 7.2 CORPORATIONS IN THE
LIMITED LIABILITY COMPANIES . . . . 193
UNITED STATES . . . . . . . . . . . . . . . . . . . . 248
§ 6.2 LIMITED LIABILITY
§ 7.3 CORPORATE RIGHTS AND
COMPANIES IN THE
POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
UNITED STATES . . . . . . . . . . . . . . . . . . . . 196
§ 7.4 ADVANTAGES OF DOING
§ 6.3 LAW GOVERNING LIMITED
BUSINESS AS A CORPORATION . . . . . . 250
LIABILITY COMPANIES . . . . . . . . . . . . . 200
§ 7.5 DISADVANTAGES OF DOING
§ 6.4 ADVANTAGES OF DOING
BUSINESS AS A CORPORATION . . . . . . 253
BUSINESS AS A LIMITED
LIABILITY COMPANY . . . . . . . . . . . . . . . 202 § 7.6 PIERCING THE
CORPORATE VEIL . . . . . . . . . . . . . . . . . . 256
§ 6.5 DISADVANTAGES OF DOING
BUSINESS AS A LIMITED LIABILITY § 7.7 CORPORATION TYPES AND
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 205 CLASSIFICATIONS . . . . . . . . . . . . . . . . . . 261
§ 6.6 LIMITED LIABILITY COMPANY § 7.8 THE PARALEGAL’S ROLE . . . . . . 268
POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 § 7.9 RESOURCES . . . . . . . . . . . . . . . . . . . 271
§ 6.7 MEMBERS’ RIGHTS AND SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 277
RESPONSIBILITIES . . . . . . . . . . . . . . . . . 208
§ 6.8 ORGANIZATION AND CHAPTER 8 Incorporations . . . . . . . . 281
MANAGEMENT OF A LIMITED
LIABILITY COMPANY . . . . . . . . . . . . . . . 209
INTRODUCTION . . . . . . . . . . . . . . . . . . . . 281
§ 6.9 FINANCIAL STRUCTURE
§ 8.1 PREINCORPORATION
OF A LIMITED LIABILITY
MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 282
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 218
§ 8.2 INCORPORATORS . . . . . . . . . . . . . . 293
§ 6.10 LIMITED LIABILITY
COMPANY LAWSUITS. . . . . . . . . . . . . . . . 220 § 8.3 CORPORATE NAME . . . . . . . . . . . . 293