Governance & Management

Making smart decisions, within the boundaries of the law and ethical responsibility, allow business owners the flexibility they expect to successfully direct their company toward their daily, monthly, and ultimate goals. Intelligent business owners figure out how to use the tools and framework they have chosen to eliminate problems and risks, without curtailing their optimistic outlook for future success.

What is the role and purpose of a corporation? Are corporations in the business of charitable contributions?

So you own some shares of a corporation.  They do business, they make money, and they spread around the profits as best they can to the shareholders.  Corporations can sue and be sued.  Corporations can make contracts for guaranty and suretyship.  Corporations can own real property, and can conduct … [Read more...]

When will courts interfere with the decisions and management of a corporation?

“In purely a business corporation the authority of the directors in the conduct of the business of the corporation must be regarded as absolute when they act within the law, and the court is without authority to substitute its judgment for that of the directors.” Toebelman v. Missouri-Kansas Pipe … [Read more...]

How do I protect my parent company from the liabilities of my subsidiary company?

Though generally a parent company is not liable for the debts of its subsidiary in the same way that a shareholder of a company is not liable for the debts of the company, there are some theories of recovery that plaintiffs use against companies in order to pierce the corporate veil and go after the … [Read more...]

How can a shareholder in an LLC or Corporation protect themselves from being taken advantage of by other shareholders or officers of the company.

Generally, a stockholder may not maintain an action on his own behalf for a wrong done by a third person to the corporation on the theory that such wrong devalued his stock and the stock of the other shareholders, because these types of actions would authorize multitudinous litigation and ignore the … [Read more...]

When will an LLC or corporation offer no protection of personal liability?

Even though the purpose of a corporation or LLC is to protect its shareholders from liability, that protection is not unlimited.  The so-called “veil” of corporate protection can be pierced and the corporate entity will be disregarded if certain factors are met.  First, there must be a unity of … [Read more...]