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1. |
Per supreme court "an artificial being, invisible,
intangible, and existing only in contemplation of law"
attributes per Blackstone; the capacity perpetual succession; to
acquire or transfer property and do other acts in the corporate
name, to purchase and hold real estate, to have a common seal,
and to make bylaws for internal government.
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2. |
The model business corporation act, prepared by the American
Bar Association, is intended to serve as a convenient guide for
revision of state business corporation laws, embracing the
interests of the state and the rights and interests of the state
and the rights and interests of corporations, shareholders and
management.
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3. |
Judicial supervision, regulating the activities of
businesses incorporated within a state is one of the oldest and
most established examples of prescriptive jurisdiction. Although
the general visitorial powers of the sovereignty may be
exercised through the courts.
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3.1 |
As a general rule, courts will refrain from interfering with
the internal management of a corporation.
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3.2 |
The courts will not interfere at the instance of minority
stockholders as long as those in control are acting honestly
and with their discretionary powers.
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4. |
Mandamus, has been regarded as an appropriate remedy to
enforce performance of legal duties of corporations. The general
rule, when law imposes a specific duty upon a private
corporation and there is no other specific remedy provided for
it's enforcement, mandamus will lie. See compel former
officer.
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5. |
Legislative control has no general rights to inspect,
regulate, control, and direct the corporation, its funds and
franchises. It may, however, reserve the power to prescribe such
regulations and provisions for corporations, as it may deem
advisable. Duty furnish information to the state as the state
has the undoubted right to require full information as to all of
the business of a private corporation created by it or had
permitted to come into the state. Accordingly, corporations are
required by statue to make annual or other reports.
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6. |
Governing Law, particularly involving its shareholders, its
directors and officers. The corporate existence is governed by
the laws of the state in which the corporation is domiciled (the
state of its creation) thus the internal affairs of a
corporation, including the relationship between the shareholders
and directors are governed by the laws of the state of
incorporation.
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6.1 |
Validity of by-laws as a general rule is to be determined by
the law of the state of incorporation. But is a bylaw of a
foreign corporation is deemed contrary to the public law of
the forum, the court will not enforce in favor of the
corporation.
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6.2 |
Relating to Stock, The laws of the state of incorporation
governs in the determination of the nature and attributes of
shares of stock, the issuance thereof, and the validity of
an issue of stock.
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6.2.1 |
The liability of promoters to the corporation,
for transferring property at a fictitious value to it in
exchange for stock, is to be determined by the laws of
the place.
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6.2.2 |
Subscriptions, the law of the state of incorporation
governs in determining the ability of a stockholder upon
an unpaid stock subscription, at least insofar as that
law does not violate the law or settled policy of the
forum.
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6.2.3 |
Transfer of Stock, the situs of shares is in the
state of incorporation. However, questions as to title
and transfer shares of stock are governed by the place
where the certificates are located or transfer takes
place. There are extensive ruling on jurisdiction on
this matter.
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6.2.4 |
Stockholders, The state of incorporation determines
who are the shareholders of a corporation, except in the
unusual case where, some other state has a more
significant relationship to the person involved and the
corporation.
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6.2.5 |
Majority and minority stockholders, the fiduciary
obligation of majority stockholder to the corporation
and its minority stockholders is measured by the law of
the state of incorporation.
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6.2.6 |
Voting and voting agreements and the legality of
voting agreements, including voting trust agreement, are
determined by the laws of the state of incorporation,
except in the event shareholders and the stockholders.
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