Beruflich Dokumente
Kultur Dokumente
Yuille
Tyler Fix
Business Organizations
Professor Yuille
Forming a corporation
When forming a corporation you must create a board of directors and/or name corporate
officers.
Preferred stock members often times receive dividends yearly based on the
business profits.
Authorized shares must be discussed and set out by the board of directors.
You must file the articles of incorporation and create bylaws for your corporation.
You also must decided if you want your shareholders to have voting power.
If you decide that shareholders get voting power then you must decide if you want them
to have a vote per share, or what type of voting structure your shareholders will have to follow.
Pros/Cons of a Corporation
Corporations can be nice for restricting liability from extended beyond the corporation.
However, if you mix personal and corporate business, liability can be extended beyond the
corporation to the private individuals who own or operate the business.
This means that all corporate credits or debits need to be done on a corporate account.
Personal charges, assets and liabilities need to be kept separate from corporate
accounts as well.
Business Organizations Prof. Yuille
Failure to keep your accounts separate could lead to the piercing of the corporate veil.
You should not use your personal accounts for corporate activity.
You should wait until your loan comes through in order to have capital for your restaurant.
If you start to mix corporate business and personal accounts, youre opening the door for
extended liability.
Piercing the corporate veil is when an individual can come after the corporation and the
individuals who own the corporation (as well as shareholders), for liability.
If a corporation mixes private and corporate funds it could be seen as if theyre commonly acting
as the same entity with the same control over one another and thus liability will extend to both.
The corporation or individuals activity also has to be a proximate cause of the harm
experienced by the individual searching for additional liability.
The court will pierce the corporate veil if an injustice would occur if they did not pierce the
corporate veil.
If you co-mingle personal and corporate bank accounts, business, transactions and liabilities,
youre significantly more likely to have the corporate veil pierced against you.
This could cause you to become personally liable for the liabilities of your corporation.