LAW 122 Lecture Notes - Lecture 7: Sole Proprietorship, General Partnership
Document Summary
No direct liability for obligations of corporation can lose investment but no more. Court willing to impose liability on true culprit court pierces corporate veil. Directors may delegate to officers shareholders never manage. Claim for fixed amount creditor"s rights if non- Claim on corporation"s residual value after other claims paid. Sue for breach of contract or put corporation into bankruptcy. Value therefore depends on value of business. Cannot sue to enforce obligations or put corporation into bankruptcy if not paid. Corporation can have different classes (set in articles) Vote for the election of board of directors. Receive dividends when declared by the board of. Receive property on dissolution after debts paid. Common shares - usually have all the three basic rights. Non-voting & no claim to the residual value on dissolution. Receive amount invested on dissolution right to payment before common shares. 21 - purpose: to understand the legal structures for the operation of a business.
