Common Law Casebook

A corporation issues shares in return for capital, property or other consideration. Classes and/or series of shares can be created with different rights, particularly with respect to dividends and voting. Preemptive rights can also exist, by which the percentage of shares owned by current shareholders cannot be diluted by the issuance of new shares. In [...]

A corporation has a perpetual life. Dissolution, the end of the legal existence of the corporation, can occur in several ways. A corporation can merge into another corporation, thereby ceasing to exist. With a consolidation or fusion, two corporations come together to form a new corporation, thereby both cease to exist. The shareholders in a [...]

In certain situations, a corporate creditor can sue to hold a shareholder personally liable for the debts of the corporation, requesting that the court invoke the equitable remedy of piercing the corporate veil. Accepted reasons for piercing the corporate veil are: inadequate capitalization, failure to observe the corporate formalities, the non-payment of dividends, insolvency of [...]

Directors and officers have a fiduciary relationship with the corporation, resulting in a duty of care to avoid harm to the corporation, a duty of loyalty by placing the corporation’s interests ahead of their own as well as a duty of good faith and in some states a duty of candor. In accordance to the [...]

The Sarbanes-Oxley Act of 2002 was enacted as a direct response to the Enron scandal. It contains a number of reforms to enhance corporate responsibility and financial disclosures and to combat corporate and accounting fraud. The “Public Company Accounting Oversight Board” was created to oversee the audit of public companies subject to the securities laws, [...]

In the federal system, the losing party has the right to appeal to the appropriate circuit court of appeals. The state systems typically grant a right to appeal to the appellate court. For both the federal and state systems, the granting of leave to appeal to the supreme court is discretionary. The scope of review [...]

If the jury has arrived at a verdict, the foreperson of the jury hands the verdict to the judge. The judge checks to see that it is in its proper form and then hands it back to the foreperson. The foreperson then reads the verdict. Judgment is entered on the verdict. In a [...]

International mergers can be subject to regulation by American regulatory agencies as well as the agencies of other countries or regional authorities, such as the European Union. In the proposed acquisition of the McDonnell Douglas Corporation by Boeing Corporation in 1997, the FTC [Federal Trade Commission] did not challenge the acquisition because it [...]

A merger is when two separate firms come under common ownership or control. A merger in itself is not illegal. For antitrust purposes, a merger can occur with the purchase by one firm of all or most of the other firm’s assets or shares, or with a consolidation.
A horizontal merger occurs when one firm [...]

Partnerships
Partnerships, originally governed by common law, are today governed by state law, either the Uniform Partnership Act of 1914 (1) or the Revised Uniform Partnership Act.(2) A partnership is simply an association of two or more persons as co-owners conducting a business for profit. Partners have a relationship of mutual agency of a fiduciary [...]