Several years ago, I wrote about stockholder inspection rights. (See Which Financial Information Must a Corporation Provide to its Shareholders? ) This post explains how stockholders of a Delaware corporation can waive inspection rights.
Delaware General Corporation Law Section 220 gives stockholders a right to “inspect for any proper purpose, and to make copies and extracts from…[t]he corporation’s stock ledger, a list of its stockholders, and its other books and records”. Furthermore, “proper purpose” means “a purpose reasonably related to such person’s interest as a stockholder.” (more…)
This post discusses the process by which a corporation may declare a dividend. This is part of Dana Shultz’s Canonical Questions on the Law™ series of questions and answers about legal issues, concepts and terminology.
Please note that this post assumes that the corporation will pay a cash dividend to its shareholders. If, instead, the corporation wishes to pay a stock dividend (issue more shares to existing shareholders), then somewhat different rules will apply. (more…)
In this post I will explain why one sometimes sees ” Reserved ” in a section of a contract. I first presented this information in a Quora answer. Please see What is a “Reserved” clause in a contract?
Sometimes Sections are Deleted from Contracts
Sometimes (especially in olden days), when one no longer needed a Section in a contract, the lawyer drafting or revising the contract didn’t want to remove that Section entirely. The reason for this reluctance? Removal would require changing the numbering of the following Sections. (more…)
In this post I will explain why, sometimes, it can be helpful to blame your lawyer for something that really is not the lawyer’s fault.
In my experience, this situation typically arises when a client is negotiating business terms with a counterparty. (more…)
It includes much of a Quora answer that I wrote on this topic. Please see How does the California Consumer Privacy Act of 2018 compare to GDPR?
Disclaimer: This comparison, of necessity, is limited to the broadest generalizations. While the California Consumer Privacy Act or 2018 (“CCPA”) is of a respectable length, the EU’s General Data Protection Regulation (“GDPR”) has 99 Articles, most with several Sub-articles – and that’s preceded by 173 lengthy paragraphs of recitals! Consequently, most of what follows is, in reality, subject to significant additional details, qualifications and exceptions that are too numerous to include here.
Now available for download: A four-page GDPR-CCPA comparison table that includes many more details than are in this post.
In an earlier post, In Delaware, No Par Value Can Cost a Bundle, I discussed the two methods by which Delaware’s franchise tax for a corporation may be calculated. This post discusses the history of those two methods.
To some extent, this post is educated guesswork. It is based on a Quora question that I answered. Please see What is the rationale/reason (not math) behind the two methods of calculation for Delaware’s domestic franchise tax fee?
This post discusses a recent decision by which the California Supreme Court adopted the so-called ABC Test for misclassification of employees as independent contractors.
This post discusses whether an LLC manager (the person who manages a limited liability company) may be a minor.
In May a Minor Form an LLC?, I discussed whether the organizer of an LLC may be a minor. In that post, I noted that only five states – Colorado, Illinois, Minnesota, Oregon and Texas – prohibit a minor from organizing an LLC. So, those are the states to which I paid the closest attention in writing this post. (more…)
The post is about the definition of the term ” managing member “. I am writing this because of a Quora question that I answered a short while ago. Please see What is the difference between a managing member and a member in an LLC?
I have not confirmed whether all of the following background information applies equally to all states. However, I know that it applies to enough states that I will present the following as applying throughout the U.S., generally. (more…)
Recently, two different individuals emailed me about their desire to form and run a legal entity while remaining anonymous.
I had to tell them that they could not achieve their objective. This post explains why that is the case.
Initial Formation is Easy
It is easy for a founder to be anonymous when taking the first step to form a corporation or a limited liability company (LLC). (more…)