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LOUIS C. ANDERSON LAW OFFICE Firm Members and Associates Louis C. Anderson, J.D. Joanne M. Curran, Legal Assistant Carey Ann Toner, Legal Assistant Send us 
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Corporate Center by the Sea 224 Commercial Blvd, Ste 310 Lauderdale by the Sea, FL 33308 USA (954)772-8050 voice (954)491-3739 Fax Serving South Florida over 30 years |
| Business/Corporate Law |
A corporation is a legal entity created through the laws of its state of incorporation. Individual states have the power to promulgate laws relating to the creation, organization and dissolution of corporations. Many states follow the Model Business Corporation Act. State corporation laws require articles of incorporation to document the corporation's creation and to provide provisions regarding the management of internal affairs. Most state corporation statutes also operate under the assumption that each corporation will adopt bylaws to define the rights and obligations of officers, persons and groups within its structure. States also have registration laws requiring corporations that incorporate in other states to request permission to do in-state business.
There has also been a significant component of Federal corporations law since Congress passed the Securities Act of 1933, which regulates how corporate securities are issued and sold. Federal securities law also governs requirements of fiduciary conduct such as requiring corporations to make full disclosures to shareholders and investors.
The law treats a corporation as a legal "person" that has standing to sue and be sued, distinct from its stockholders. The legal independence of a corporation prevents shareholders from being personally liable for corporate debts. It also allows stockholders to sue the corporation through a derivative suit and makes ownership in the company (shares) easily transferable. The legal "person" status of corporations gives the business perpetual life; deaths of officials or stockholdersdo not alter the corporation's structure.
Corporations are taxable entities that fall under a different scheme from individuals. Although corporations have a "double tax" problem --both corporate profits and shareholder dividends are taxed -- corporate profits are taxed at a lower rate than rates for individuals.
Corporate law has important intersections with contracts and commercial transactions law.
CONTRACTS: AN OVERVIEW
Contracts are promises that the law will enforce. The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise/contract. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration. Certain promises that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the otherparty.
Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law. Statutory law may require some contracts be put in writing and executed with particular formalities. Otherwise, the parties may enter into a binding agreement without signing a formal written document. Most of the principles of the common law of contracts are outlined in the Restatement Second of The Law of Contracts (http://www.ali.org/ali/contract.htm) published by the American Law Institute. The Uniform Commercial Code, whose original articles have been adopted in nearly every state, represents a body of statutory law that governs important categories of contracts. The main articles that deal with the law of contracts are Article 1 (General Provisions) Sections of Article 9 (Secured Transactions) ( govern contracts assigning the rights to payment in security interest agreements. Contracts related to particular activities or business sectors may be highly regulated by state and/or federal law. See Law Relating To Other Topics Dealing with Particular Activities or Business Sectors.
MERGERS AND ACQUISITIONS
A "Corporate Merger" is the combination of the assets and liabilities of two firms to form a single business entity. In everyday language, the term "acquisition" tends to be used when a larger firm absorbs a smaller firm, and "merger" tends to be used when the combination is portrayed to be between equals.
The success of a merger is measured by whether the value of the acquiring firm is enhanced by it. Often, this requires the evaluation of a third, disinterested party, like your attorney, to evaluate the feasibility of doing the merger or acquisition.
