TABLE OF CONTENTS
Volume One
PART I Selection of the Manner of Doing Business
Chapter 1 Proprietorships
§ 1.01 Background
§ 1.02 Proprietorships
§ 1.03 General Description of Proprietorships
§ 1.04 Minnesota Law Regarding Proprietorships - Nontax Considerations
§ 1.05 Proprietorship Tax Considerations
§ 1.06 Advantages and Disadvantages of the Proprietorship
Form of Business Organization
Chapter 2 General Partnerships
§ 2.01 Introduction
§ 2.02 General Description of Partnerships
§ 2.03 Minnesota Law Regarding Partnerships and Their Formation
§ 2.04 Minnesota Law and Uniform Partnership Law
Considerations - the Use of the Written Partnership Agreement
§ 2.05 General Partnership Tax Considerations
§ 2.06 Advantages and Disadvantages of the Partnership
Form of Business Organization
Chapter 3 Limited Partnerships
§ 3.01 Definition
§ 3.02 General Description of Limited Partnerships
§ 3.03 Minnesota Law Regarding Limited Partnerships and
Formation Issues
§ 3.04 Minnesota Law and Uniform Limited Partnership Law
Considerations - the Use of the Written Limited
Partnership Agreement
§ 3.05 Limited Partnership Tax Considerations
§ 3.06 Advantages and Disadvantages of the Limited
Partnership Form of Business Organization
Chapter 4 Joint Ventures
§ 4.01 Definition
§ 4.02 General Description of Joint Ventures
§ 4.03 Minnesota Law Regarding Joint Ventures
§ 4.04 Joint Venture Tax Considerations
§4.05 Advantages and Disadvantages of the Joint
Venture Form of Business Organization
§ 4.06 A Brief View of International Joint Ventures
§ 4.07 - C Corporations
§ 4.08 - Subchapter S Corporations
§ 4.09 - Limited Liability Companies
Chapter 5 The Minnesota Business Corporation
§ 5.01 Selection of Corporate Form of Business Organization
§ 5.02 General Description of the Business Corporation
§ 5.03 Minnesota Law Regarding the Minnesota Business
Corporation
§ 5.04 Some Specific Model Business Corporation Act
Considerations
§ 5.05 Taxation of the C Corporation
§ 5.06 Taxation of the Subchapter S Corporation
§ 5.07 Other Minnesota Business Corporation Tax Considerations:
A Brief Overview
§ 5.08 Advantages and Disadvantages of the Corporate Form
of Business Organization
Chapter 6 The Minnesota Professional Firm
§ 6.01 Introduction
§ 6.02 Definitions under Minnesota Statutes
§ 6.03 Requirements
§ 6.04 Professional Services
§ 6.05 Name
§ 6.06 Shareholders/Shares
§ 6.07 Directors and Officers
§ 6.08 License Board
§ 6.09 Examination
§ 6.10 Annual Report
§ 6.11 Nontax Advantages of Incorporation of the
Professional Corporation - Limited Liability
§ 6.12 - Centralized Management and Predictable Authority
Structure
§ 6.13 - Continuity of Existence
§ 6.14 Nontax Disadvantages - Costs of Formation and Operation
§ 6.15 - Regulation
§ 6.16 - Formality
§ 6.17 Some Tax Advantages
§ 6.18 - Fringe Benefits
§ 6.19 - - Retirement Plan
§ 6.20 - - Insurance
§ 6.21 - Retained Earnings
§ 6.22 Some Tax Disadvantages - Double Taxation
§ 6.23 - Unreasonable Accumulated Earnings
§ 6.24 - Personal Holding Company Taxes
§ 6.25 Unreasonable Compensation
Chapter 7 Nonprofit Corporations
§ 7.01 Introduction
§ 7.02 Profit and Nonprofit Corporations Distinguished
§ 7.03 Trade Associations, Religious Organizations, and
Political Organizations Distinguished
§ 7.04 The Organization of Nonprofit Corporation:
Organizational Meeting
§ 7.05 Articles of Incorporation
§ 7.06 Name, Trademarks, and Service Marks
§ 7.07 Amendment of Articles of Incorporation
§ 7.08 Purpose
§ 7.09 Powers
§ 7.10 Bylaws of Nonprofit Corporations
§ 7.11 Directors
§ 7.12 Officers
§ 7.13 Members
§ 7.14 Liability of Nonprofit Officers, Directors, Members,
and Agents
§ 7.15 Indemnification
§ 7.16 Dissolution of Nonprofit Corporations
§ 7.17 - Voluntary Dissolution by Incorporators
§ 7.18 - By Board and Voting Members
§ 7.19 Distribution of Assets in Dissolution
§ 7.20 Involuntary Dissolution - Judicial Intervention
§ 7.21 Tax Considerations - Introduction
§ 7.22 - I.R.C. § 501(c)
§ 7.23 Organized and Operated
§ 7.24 Purposes - Religious
§ 7.25 - Charitable
§ 7.26 - Scientific
§ 7.27 - Educational Purposes
§ 7.28 - Social Welfare Organizations
§ 7.29 Procedure
§ 7.30 Nonprofit Corporations in Countries Other Than the United States
Chapter 8 Trade Associations
§ 8.01 Introduction
§ 8.02 Unincorporated Associations
§ 8.03 - Limited Advantages
§ 8.04 - Additional Disadvantages
§ 8.05 - - Property
§ 8.06 - - Lawsuits/Liabilities
§ 8.07 Incorporated Associations
§ 8.08 - Organization of Incorporated Associations
§ 8.09 Liabilities
§ 8.10 Tort Claims - Copyrights
§ 8.11 - Defamation
§ 8.12 - Product Liability
§ 8.13 Antitrust and Related Issues
§ 8.14 Meetings and Calling of Meetings
§ 8.15 Trade Shows and Trade Publications
§ 8.16 Members
§ 8.17 Standard/Certificate
§ 8.18 Some Taxation Issues
Chapter 9 The Franchise
§ 9.01 Definition
§ 9.02 General Summary of Franchises
§ 9.03 Federal Franchise Law Issues
§ 9.04 The Minnesota Franchise Act and Issues Arising
Therefrom
§ 9.05 Piercing the “Franchise Veil” and Direct Liability of
Franchisors to Third Persons and Entities
§ 9.06 Advantages and Disadvantages of the Franchise Form
of Business Organization
Chapter 10 Other Forms of Doing Business
§ 10.01 Introduction
§ 10.02 Tenancies in Common
§ 10.03 Joint Tenancies and Tenancies by the Entirety
§ 10.04 Trusts
§ 10.05 Independent Contracting as a Phantom Business Enterprise
§ 10.06 Limited Liability Companies
§ 10.07 Limited Liability Partnerships
§ 10.08 Partnership-Style Entities
§ 10.09 Corporate-Style Entities
Chapter 11 Preincorporation Promotion Activities
§ 11.01 Introduction
§ 11.02 Definitions of Promoters and the Phenomenon of Promotion
§ 11.03 Liabilities of Promoters for Preincorporation Activities
§ 11.04 Fiduciary Duties of Promoters
§ 11.05 Liabilities of the Corporation for Promoter Activity
§ 11.06 Agreements among Promoters; Preincorporation Agreements
§ 11.07 The Promoter Agreement Itself
§ 11.08 Other Procedures Incident to Prebusiness Promoter
Activity Stages Including Screening for Noncompetition,
Nondisclosure, Preliminary Intellectual Property
Pitfalls, and Securities Law Risks
Chapter 12 Preincorporation Subscriptions to Stock and
Other Investments in the Corporation
§ 12.01 Introduction
§ 12.02 Definition of Subscription
§ 12.03 Subscription versus Purchase
§ 12.04 Liabilities of the Subscriber
§ 12.05 Liabilities of the Corporate Entity
§ 12.06 Subscriptions after Incorporation
§ 12.07 Oversubscription
§ 12.08 Time for Payment Pursuant to Subscriptions
§ 12.09 Other Legal Issues Surrounding Subscriptions
Chapter 13 Preincorporation Agreements among
Shareholders and/or Investors
§ 13.01 Introduction
§ 13.02 Description of the Purpose of Preincorporation Agreements
§ 13.03 Voting Trust
§ 13.04 Shareholder Voting Agreement
§ 13.05 Shareholder Control Agreement
§ 13.06 Share Transfer Restrictions
§ 13.07 Typical Provisions Included in Preincorporation
Agreements from Minority and Majority Ownership
Interest Perspectives
§ 13.08 Protecting the Minority Shareholder’s Interests
§ 13.09 Protecting the Majority Shareholder’s Interests
§ 13.10 Specific Problems of Enforceability of Preincorporation Agreements
§ 13.11 Effectiveness of “Letters of Intent” with Respect to
Preincorporation and Other Business Authority
§ 13.12 Effectiveness of Oral Understandings with Respect
to Preincorporation and Other Business Activity
Chapter 14 Protection of Intellectual Properties
§ 14.01 Trade Names and Assumed Names under Minnesota Law
§ 14.02 - Mechanics of Trade Name or Assumed Name Registration
and Acquisition of Trademark Rights in General
§ 14.03 - Litigation
§ 14.04 Trademarks and Service Marks under Minnesota and Federal Law
§ 14.05 - Definition, Acquisition, and Limitations
§ 14.06 - Subject Matter of Trademarks
§ 14.07 - Mechanics of Trademark Acquisition
§ 14.08 - Assignment of Trademarks
§ 14.09 - Affidavits or Declarations of Use and Incontestability
§ 14.10 - Renewal
§ 14.11 - Litigation
§ 14.12 Dilution
§ 14.13 - Anticybersquatting Consumer Protection Act and
Protection of Domain Names
§ 14.14 - Common Law Trademark Rights
§ 14.15 - Trade Dress
§ 14.16 - Trademarks under Minnesota Law
§ 14.17 - Service Marks
§ 14.18 - Foreign Trademarks
§ 14.19 Copyrights under Federal Law
§ 14.20 - Original Works
§ 14.21 - Authorship
§ 14.22 - Fixation
§ 14.23 - Subject Matter of Copyright
§ 14.24 - Copyright Ownership
§ 14.25 - Rights under a Valid Copyright
§ 14.26 - Copyright Duration
§ 14.27 - Copyright Notice
§ 14.28 - Registration of Copyright
§ 14.29 - Deposit
§ 14.30 - Copyright Infringement
§ 14.31 - Fair Use
§ 14.32 Patents under Federal Law
§ 14.33 - Patent Prosecution
§ 14.34 - Duty of Disclosure
§ 14.35 - Fees Associated with Patent Applications
§ 14.36 - Statutory Requirements for Patentability
§ 14.37 - Statutory Bars to Patentability
§ 14.38 - Related Applications
§ 14.39 - Transfer of Patent Rights
§ 14.40 - Postissuance Proceedings
§ 14.41 - Patent Rights and Litigation
§ 14.42 - Foreign Patents
§ 14.43 - Design Patents
§ 14.44 - Plant Patents
§ 14.45 - Patents in a Corporation
§ 14.46 - Interface between Patents, Copyright, and Trade Secret Law
§ 14.47 - Future Developments in U.S. Patent Law
§ 14.48 - Trade Secrets and Other Proprietary Information under
Minnesota State and Federal Law
§ 14.49 - Minnesota Law
§ 14.50 - - Existence of a Trade Secret
§ 14.51 - - Confidential Relationship
§ 14.52 - - Use of Disclosure of Information by Defendant
§ 14.53 - - Remedies
§ 14.54 - - Existence of a Contract
§ 14.55 - - Breach of Contract
§ 14.56 - - Damages
§ 14.57 - Trade Secrets in the Federal Arena
§ 14.58 - - Disclosure of Trade Secrets to the Patent Office
§ 14.59 - - Disclosure of Trade Secrets to the Internal Revenue Service
§ 14.60 - - Minnesota State and Federal Trademark Law
§ 14.61 - - Disclosure of Trade Secret Information to
Other Federal Authorities
§ 14.62 Early Audits for Unwitting and Unintentional
Uses and Infringements by New Enterprise and Its
Employees: A Cautionary Note Regarding the Use of
Proprietary Information by a New Employee
§ 14.63 Policing for Possible Infringement of Trademark,
Copyright, and Patent Rights
§ 14.64 Intellectual Property Assignment
§ 14.65 Protection of Software/Computer Programs
§ 14.66 - Copyright Protection for Software
§ 14.67 - Patent Protection for Software
§ 14.68 - Software and Trade Secret Law
§ 14.69 - Preferred Methods of Protecting Software
§ 14.70 - Technology Licensing Agreement
§ 14.71 - Protection of Technology Rights
§ 14.72 - Trade Secret Law
§ 14.73 - Copy Protection of Software
§ 14.74 - Protection of Semiconductor Chips
§ 14.75 - Subject Matter
§ 14.76 - Registration, Notice, and Duration
§ 14.77 - Ineligible Works
§ 14.78 - Rights and Limitations of Those Rights
§ 14.79 - Infringement Litigation and Available Remedies
§ 14.80 Brief Summary of Law of Unfair Competition and
Unfair Trade Practices in the State of Minnesota
§ 14.81 - Misrepresentation of Product Quality
§ 14.82 - Selling Below Cost
§ 14.83 Antitrust
§ 14.84 Contracts in Restraint of Trade
§ 14.85 Misappropriation of Trade Secrets
§ 14.86 - Minnesota Invention Act
§ 14.87 Taxation of Intellectual Property
§ 14.88 Employment Law Considerations When Intellectual
Property Is Involved
§ 14.89 Other Legal Issues Involving Subcontractors, Customers
or Vendees When Intellectual Property Is Involved
§ 14.90 International Intellectual Property Issues
§ 14.91 - Copyright Protection
§ 14.92 - Patent Protection
§ 14.93 - Trademark Protection
§ 14.94 - Trade Secrecy
§ 14.95 - Conclusion
§ 14.96 Patent Protection
§ 14.97 - Copyright Protection
§ 14.98 - Trade Secrets
§ 14.99 - Domestic Protection of Foreign Trademarks
§ 14.100 - Developments in International Intellectual Property Protection
§ 14.101 - Conclusion
Chapter 15 An Overview of Minnesota Corporate Capitalization:
Debt, Equity and Other Sources
§ 15.01 Introduction
§ 15.02 - Debt
§ 15.03 - Equity
§ 15.04 "Thin" Corporation
§ 15.05 - Piercing the Corporate Veil
§ 15.06 - Taxation Issues
§ 15.07 The Objective of Tax-Free Incorporation
§ 15.08 - Realizing Gain or Loss
§ 15.09 - Recognizing Gain and Loss
§ 15.10 - Tax-Free Incorporation Goals
§ 15.11 Contributions of Labor, Intellectual Property, and Ideas
§ 15.12 - I.R.C. § 351
§ 15.13 - Consideration
§ 15.14 The Problematical Definition of “Securities” under
Minnesota and Federal Law and the Implications Thereof
§ 15.15 - Securities under Federal Law
§ 15.16 - Consequences of Purchasing, Holding, and Selling a Security
§ 15.17 - Definition of Securities under Minnesota Law
§ 15.18 Common Securities
§ 15.19 - Authorized Shares
§ 15.20 - Issued Shares
§ 15.21 - Relation between Capital and Capital Stock
§ 15.22 - Treasury Stock
§ 15.23 - Stock as Personal Property
§ 15.24 - Classes of Stock Generally
§ 15.25 - - Common Stock
§ 15.26 - - Preferred Stock
§ 15.27 - Participation
§ 15.28 - Voting
§ 15.29 - Dividend Preferences
§ 15.30 - Liquidation Preferences
§ 15.31 - Redemption
§ 15.32 - Conversion Privileges
§ 15.33 - Preferred Stock and the Minority Shareholder
§ 15.34 - Preemptive Rights
§ 15.35 - Use of Stock for Estate Planning Purposes
§ 15.36 - Options
§ 15.37 - Warrants
§ 15.38 - "Rights to Purchase" under Minnesota Law
§ 15.39 - Bonds
§ 15.40 - - Original Issue
§ 15.41 - - Secondary Market
§ 15.42 - Debentures
§ 15.43 - Promissory Notes as Securities
§ 15.44 - Hybrid Securities
§ 15.45 Debt Capitalization
§ 15.46 - Major Legal Issues Surrounding Debt Capitalization
§ 15.47 - Bank Financing, Initial Lines of Credit, and Common
Instrumentation Incident to Debt Capitalization
§ 15.48 - Initial Lines of Credit
§ 15.49 - Common Instrumentation Incident to Debt Capitalization
§ 15.50 - Business Financial Statement
§ 15.51 - Personal Financial Statement
§ 15.52 - Loan Proposal
§ 15.53 - Credit Report
§ 15.54 - Waiver of Limited Liability
§ 15.55 - Assignment of Accounts Receivable
§ 15.56 - Loans by Shareholders; Loans by Directors
§ 15.57 - - Loans by Shareholders
§ 15.58 - - Loans by Directors
§ 15.59 - Loans by Other Related Parties
§ 15.60 - Banking Institutions
§ 15.61 - Small Business Investment Companies
§ 15.62 General Overview of Public Financing
§ 15.63 - Public Stock Offerings
§ 15.64 - The Decision to Go Public; A Brief Summary
§ 15.65 - - Potential Market for the Corporation’s Securities
§ 15.66 - - Willingness to Surrender Control
§ 15.67 - - Nature of the Corporation
§ 15.68 - - Availability of Other Sources of Capital
§ 15.69 - - Securities Regulation
§ 15.70 - - Formalities Regarding Shareholders
§ 15.71 Small Business Administration Loans
§ 15.72 - Eligibility
§ 15.73 - Credit Merits
§ 15.74 - Types of Loan Programs
§ 15.75 - - Regular Guaranteed Loans
§ 15.76 - - Short-Term Guaranteed Loans
§ 15.77 - - Direct Loans
§ 15.78 - - Certified Development Company Loans
§ 15.79 - - Small Business Investment Companies
§ 15.80 - Minorities and Women
§ 15.81 - Loan Denials
§ 15.82 - SBA's "Sue-and-Be-Sued" Status
§ 15.83 Community Development Authority and Other Related Loans
§ 15.84 - Community Development Corporation Program
§ 15.85 - The Greater Minnesota Corporation
§ 15.86 - - Business Innovation Centers
§ 15.87 - - Applied Research Institutes
§ 15.88 - - Technology Research Grants Program
§ 15.89 - - Advanced Manufacturing Technology Centers
§ 15.90 - - Seed Capital Fund Program
§ 15.91 - Minority Assistance Programs
§ 15.92 Investment by Venture Capital Companies
§ 15.93 - Definition
§ 15.94 - Operation
§ 15.95 - Venture Capitalization Agreement
§ 15.96 Equity Participation Loans
§ 15.97 - Lender Liability
§ 15.98 - Summary
§ 15.99 Investment in Corporation by Foreign Investors
§ 15.100 - Reporting Requirements
§ 15.101 Employee Contributions to Corporate Capitalization
§ 15.102 - Employees as Private Lenders
§ 15.103 - Employee Stock Ownership Plans
§ 15.104 - Employees’ Fortunes Tied to Those of the Corporation
Chapter 16 The Corporation or Business Operating in One or
More States: Selecting the State of Incorporation
§ 16.01 Introduction
§ 16.02 State Corporations Law
§ 16.03 Corporate Income Taxation
§ 16.04 Shareholder Welfare
§ 16.05 Piercing the Corporate Veil
§ 16.06 Products Liability Laws
§ 16.07 - Contributory and Comparative Negligence
§ 16.08 - Liability for Torts Committed by Predecessor Corporations
§ 16.09 Environmental Law
§ 16.10 State Laws Regulating Corporate Voting
§ 16.11 Officer and Director Liability for Actions of the Corporation
§ 16.12 The Meaning of "Doing Business" in Minnesota
§ 16.13 - Minnesota Taxation
§ 16.14 - State Jurisdiction over Corporations
§ 16.15 Out-of-State Revenue Streams and the Tax Laws
§ 16.16 Tax Treatment under Federal Law
§ 16.17 Corporate Ownership of Property
§ 16.18 - Corporate Ownership of Real Property
§ 16.19 - The Agricultural Foreign Investment Disclosure Act of 1978
§ 16.20 - Corporate Ownership of Personal Property
§ 16.21 Offices in and Contacts with Other States
§ 16.22 Use of Out-of-State Labor
§ 16.23 Use of Labor from Out of the Country
Chapter 17 The Minnesota Business Operating in Foreign Countries
§ 17.01 Doing Business Abroad: An Overview
§ 17.02 Cultural Differences
§ 17.03 Currency
§ 17.04 Infrastructure
§ 17.05 Employees
§ 17.06 Foreign Governments
§ 17.07 Common Forms of Doing Business Abroad
§ 17.08 Foreign Venture Schemes Available to Corporations
§ 17.09 - Subsidiaries
§ 17.10 - The Joint Venture
§ 17.11 - Minority Interest in Foreign Corporation
§ 17.12 Tax Considerations of Doing Business Abroad
§ 17.13 Taxation of Specific Business Forms - Corporations
§ 17.14 - Foreign Personal Holding Companies
§ 17.15 - Foreign Sales Corporations
§ 17.16 Nontax Considerations
§ 17.17 Summary
Chapter 18 Use of Corporate Agents and Service Companies
§ 18.01 Use of Corporate Agents and Service Companies
§ 18.02 Service of Process on a Corporation
§ 18.03 Service on a Dissolving or Dissolved Corporation
Chapter 19 An Overview of Minnesota and Federal Securities Law
§ 19.01 General Securities Law Concepts
§ 19.02 Federal Securities Law
§ 19.03 Securities Subject to Federal Law
§ 19.04 The Securities Act of 1933
§ 19.05 The Securities Exchange Act of 1934
§ 19.06 Disclosure under the 1934 Act
§ 19.07 Integrated Disclosure
§ 19.08 - Executive Compensation Disclosure
§ 19.09 Simplified Disclosure for Small Companies
§ 19.10 Sarbanes-Oxley Act of 2002 and Public Company
Accounting Reform
§ 19.11 Key Issues under Federal Securities Law
§ 19.12 - Insider Trading
§ 19.13 - Section 16(b)
§ 19.14 - Rule 10b-5
§ 19.15 - The O’Hagan Decision and the Extension of SEC
Rule-Making Authority
§ 19.16 - Tender Offers and the Williams Act
§ 19.17 - Proxy Regulation
§ 19.18 - The Stoneridge Decision and Scheme Liability
§ 19.19 Key Provisions of Minnesota Securities Law
§ 19.20 - Definition of Securities under Minnesota Law
§ 19.21 - Minnesota Blue Sky Laws
§ 19.22 - Current Minnesota Securities Law
§ 19.23 - Small Corporate Offering Registration (SCOR)
§ 19.24 - Licensing of Securities Brokers
§ 19.25 - Bonding of Licensed Brokers
§ 19.26 - Federal Preemption of State Licensing and Bonding Requirements
§ 19.27 - Penalties for Violations of Minnesota Securities Laws
§ 19.28 Issuance of Securities to Persons in Foreign Countries
Chapter 20 Tax Aspects of the Corporation at Formation
§ 20.01 Receipt of Stock for Services
§ 20.02 Section 83 and the Taxation of Property Transferred for Services
§ 20.03 - Transfer of Property to the Corporation
§ 20.04 - Tax Consequences for the Transferor
§ 20.05 - Tax Consequences for the Transferee Corporation
§ 20.06 - Transfers of Property to a Corporation as a Gift
§ 20.07 Income Tax Basics
§ 20.08 - Basis
§ 20.09 - Adjustments to Basis
§ 20.10 - Realization
§ 20.11 - Recognition
§ 20.12 Corporate Income Taxation
§ 20.13 - Computation of Tax
§ 20.14 - Gross Income
§ 20.15 - Exclusions
§ 20.16 - Deductions
§ 20.17 - Ordinary and Necessary Business Expenses
versus Capital Expenditure
§ 20.18 - Tax Rate
§ 20.19 - Tax Credits
§ 20.20 - Capital Gains and Losses
§ 20.21 Illustrations
§ 20.22 - Receipt of Stock for Cash
§ 20.23 - Appreciated Property for Stock
§ 20.24 - Services for Stock
§ 20.25 - Intellectual Property for Stock
§ 20.26 - Property for Stock and Cash
§ 20.27 - Assumption of Liabilities
§ 20.28 - Going Business for Stock
§ 20.29 - General Considerations
§ 20.30 - - Choice of a Taxable Year
§ 20.31 - - Method of Accounting
§ 20.32 - Depreciation by the Transferee Corporation
§ 20.33 - Installment Obligations
§ 20.34 - Treatment of Organizational and Start-Up Expenses
§ 20.35 - Cash Basis Going Concerns
§ 20.36 - Method of Accounting
§ 20.37 - Accounts Receivable
§ 20.38 - Partnership for Stock
§ 20.39 - Intentional Avoidance of I.R.C. § 351
§ 20.40 - Step Transaction Doctrine
§ 20.41 - I.R.C. § 351 and Existing Corporations
§ 20.42 - I.R.C. § 351 Administrative Issues
§ 20.43 - - Filing Requirements
§ 20.44 - - Ruling Requests
§ 20.45 Section 1244 Stock
§ 20.46 - Stock Owned by an Individual
§ 20.47 - Stock Originally Issued to the Individual
§ 20.48 - Stock Issued for Money or Property
§ 20.49 - Domestic Small Business Corporation
§ 20.50 Stock Issued in Exchange for Property: Section 351
§ 20.51 - One or More Persons
§ 20.52 - Property
§ 20.53 - Exchange
§ 20.54 - Solely for Stock
§ 20.55 - Recognition of Gain on Transferred Property
§ 20.56 - Control
§ 20.57 - Basis of Property Received by the Transferor
§ 20.58 - Basis of Property Received by the Corporation
§ 20.59 - Limitations on Section 351 Exchanges
§ 20.60 - Consequences of Failing to Comply with Section 351
§ 20.61 Corporate Formation: A Look at Deferred Compensation -
Introduction
§ 20.62 - Qualified Plans
§ 20.63 - - Defined Contribution Plans
§ 20.64 - - - Money Purchase Pension Plan
§ 20.65 - - - Profit-Sharing Plan
§ 20.66 - - - Stock Bonus Plan
§ 20.67 - - - Section 401(k) Plan
§ 20.68 - - - Simplified Employee Pension
§ 20.69 - - Defined Benefit Plans
§ 20.70 - - General Plan Requirements
§ 20.71 - - - Minimum Age and Service Requirements
§ 20.72 - - - Vesting Schedules
§ 20.73 - - - Reporting and Record Keeping
§ 20.74 - Nonqualified Deferred Compensation
§ 20.75 - - Constructive Receipt
§ 20.76 - - Economic Benefit
§ 20.77 - - Social Security Taxes
§ 20.78 - - Taxable at Employee’s Death
§ 20.79 - Stock Options
§ 20.80 - - Statutory Stock Options
§ 20.81 - - Nonstatutory Stock Options
§ 20.82 Tax Accounting Aspects of Section 351 Transactions
§ 20.83 - Transferor Accounting
§ 20.84 - Corporate Accounting
§ 20.85 - Depreciation
§ 20.86 Issuance of Debt in Exchange for Property
§ 20.87 Choice between Stock and Debt as a Tax Issue: Differences
between Debt and Equity Capitalization to the Investor
and to the Corporation
§ 20.88 - Tax Consequences of Debt Capitalization: For the Investor
§ 20.89 - For the Corporation
§ 20.90 - Tax Consequences of Equity Capitalization: For the Investor
§ 20.91 - For the Corporation
§ 20.92 - Analysis of Tax Consequences of Debt and
Equity Capitalization
§ 20.93 - A Preliminary Note on Bad Business Debts
§ 20.94 - Terms of the Debt Instrument
§ 20.95 - - Terms of Repayment
§ 20.96 - - Secured and Unsecured Debts
§ 20.97 - - Default
§ 20.98 - - Remedies upon Default
§ 20.99 - - Voting Rights in the Event of Default
§ 20.100 - - Conversion Privileges
§ 20.101 - - Availability of Accelerated Repayment
§ 20.102 - - Subordination
§ 20.103 - - Compliance with Applicable Securities Laws
§ 20.104 - - Transferability of the Debt Instrument
§ 20.105 - - Choice of Laws
§ 20.106 - - Escrow
§ 20.107 - - Reporting and Compliance with Minnesota Statutes
§ 20.108 - - Limitations on the Corporation’s Ability to Issue
Further Debt or Equity
§ 20.109 - - Limitations on the Type of Business in Which the
Corporation May Participate
§ 20.110 - Debt-to-Equity Ratio
§ 20.111 The C Corporation
§ 20.112 - Income Tax
§ 20.113 - Accumulated Earnings Tax
§ 20.114 - Personal Holding Company Tax
§ 20.115 The S Corporation
§ 20.116 - Background
§ 20.117 - Election under Section 1362
§ 20.118 - Effect of S Corporation Status on the Corporation
§ 20.119 - Effect of S Corporation Status on Shareholders
§ 20.120 - Circumstances Where Income Tax May Be Imposed
on an S Corporation
§ 20.121 Multiple Corporations as a Tax and Business Planning Phenomenon
§ 20.122 - Reformation for Tax Avoidance Reasons
§ 20.123 - Factors Mitigating in Favor of Multiple Corporations
§ 20.124 - Factors Mitigating against Multiple Corporations
§ 20.125 - Summary
Chapter 21 Successor Liability on Purchase of Assets
from Another Business
§ 21.01 Introduction
§ 21.02 Statutory Mergers
§ 21.03 Purchase of the Assets of a Corporation
§ 21.04 Assumption of Liabilities
§ 21.05 De Facto Merger
§ 21.06 Mere Continuation
§ 21.07 Fraud
§ 21.08 Special Considerations for the Application of the General Rule
§ 21.09 Successor Liability in the Context of Environmental Laws
§ 21.10 Successor Liability outside Corporate Law
§ 21.11 Bulk Transfers Act
§ 21.12 Fraudulent Transfers
§ 21.13 Products Liability
Chapter 22 Guaranties
§ 22.01 Introduction
§ 22.02 Shareholder Defenses to Liability as Guarantor -
Lack of Consideration
§ 22.03 - Material Alteration
§ 22.04 - Extension of Payments
§ 22.05 Obligations of Guarantor
§ 22.06 Usury
§ 22.07 - "Direct and Primary" Exception
§ 22.08 - "Individual Purpose" Exception
§ 22.09 Summary
Chapter 23 Legal Issues to Be Addressed during Preincorporation,
Incorporation, and Operational Periods
§ 23.01 Estate Planning Issues at Formation
§ 23.02 - Shifting Income to Family Members
§ 23.03 - - Family Limited Partnerships
§ 23.04 - - Subchapter S Corporations
§ 23.05 - - The Kiddie Tax
§ 23.06 - - Capital Provided by Family Members
§ 23.07 - Shifting Assets to Family Members
§ 23.08 - - Freezing the Value of an Ownership Interest
§ 23.09 - - Annual Gift Tax Exclusion
§ 23.10 - - Buy-Sell Agreements
§ 23.11 - Funding Estate Tax Obligations in Close Corporations
§ 23.12 Intellectual Property Issues at Formation
§ 23.13 Employment Law Issues at Formation
§ 23.14 Labor and Union Legal Issues at Formation
§ 23.15 - Leased Employees and Independent Contractors
§ 23.16 Pollution, Hazardous Waste, and Other Environmental
Concerns at Formation
§ 23.17 - Who Are Responsible Parties?
§ 23.18 - Corporate Officers and Directors
§ 23.19 - Preventing and Defending against Liability
§ 23.20 - Types of Regulated Activities
§ 23.21 - - Air Pollution
§ 23.22 - - Water Pollution
§ 23.23 - - Hazardous Waste and Solid Waste
§ 23.24 - - Petroleum Tanks
§ 23.25 - - Land Pollution
§ 23.26 Real Property Law/Leasing Law at Formation
§ 23.27 - Purchase versus Lease Analysis
§ 23.28 - Financial Analysis
§ 23.29 - Needs of Company
§ 23.30 - Personal Preferences
§ 23.31 - Tax Treatment of Purchase
§ 23.32 - Tax Treatment of Lease
§ 23.33 Alternatives to Straight Lease or Straight PurchaseArrangement - Sale/Leasebacks
§ 23.34 - Partial Purchase
§ 23.35 - Lease with Option to Buy
§ 23.36 - Significant Provisions in the Lease
§ 23.37 Insurance Law
§ 23.38 - Insurance and Indemnification for Corporate
Officers and Directors
§ 23.39 - - Directors’ and Officers’ Insurance
§ 23.40 - - Indemnification
§ 23.41 - - Other Forms of Director and Officer Protection
§ 23.42 Fringe Benefits to Key Personnel
§ 23.43 - Employee Incentive Generally
§ 23.44 Licensing, Permits, Consents for Corporate Activity -
Some Common Problems
§ 23.45 - Overview
§ 23.46 - Issues
§ 23.47 - General Compliance Issues
§ 23.48 - Types of Government Regulation - Licenses
§ 23.49 - - Permits
§ 23.50 - - Bonding
§ 23.51 - - Time Frames
§ 23.52 - - Participation in Government Regulation Rule Making
§ 23.53 - - Agency; Principal and Agent Issues
§ 23.54 - - Liability for Licensed Employees
§ 23.55 - - Timeliness
§ 23.56 - Illegality
§ 23.57 - Minnesota’s Authority to License and Issue Permits
§ 23.58 - - Minnesota Regulatory Licenses and Permits
§ 23.59 - Consents to Corporate Activity
§ 23.60 - International Licensing Permits
§ 23.61 - Conclusion
Volume Two
PART II Incorporation and Initial Legal Documentation
Chapter 24 Overview of Incorporation Documentation
§ 24.01 Importance
§ 24.02 Purposes
§ 24.03 Corporate Control Issues
§ 24.04 Interrelationship of Incorporation Documents
§ 24.05 Ethical Issues - Conflicts of Interest
§ 24.06 - Duty of Competence
§ 24.07 Functional Approach
Chapter 25 Defective Incorporation and Disregard of the
Corporate Entity
§ 25.01 Defective Incorporation
§ 25.02 Risks of Defective Incorporation
§ 25.03 Defective Incorporation Distinguished from Disregard
of the Corporate Entity
§ 25.04 Incorporation Documentation and Disregard of the
Corporate Entity
Chapter 26 Subscription Agreements
§ 26.01 Statutory Summary and Purpose of Subscription Agreements
§ 26.02 Legal Effect
§ 26.03 Illegal Subscriptions
§ 26.04 Transfer of Subscriptions
§ 26.05 Agency Law Issues on Subscriptions
§ 26.06 Contents Required
§ 26.07 Corporate Control and Minority Rights
§ 26.08 Financial Reporting of Subscription Agreements
Chapter 27 Share Issuance Documentation
§ 27.01 Statutory Summary and Purpose of Share Certificates
§ 27.02 Legal Effect
§ 27.03 Contents Required
§ 27.04 Corporate Control and Minority Rights - Power to Issue Shares
§ 27.05 - Restrictions on Transfer after Issuance
§ 27.06 - Filing Process
§ 27.07 - Record Keeping
Chapter 28 Articles of Incorporation
§ 28.01 Statutory Summary and Purpose of Articles
§ 28.02 Legal Effect
§ 28.03 - Separate Effect
§ 28.04 - Other Documentation and Acts Are Nonessential to Incorporation
§ 28.05 - Overlap with Regard to Other Documents
§ 28.06 Contents
§ 28.07 - Required Provisions
§ 28.08 - - Corporation’s Name
§ 28.09 - - Registered Office and Agent
§ 28.10 - - Aggregate Number of Shares
§ 28.11 - - Names and Addresses of Incorporators
§ 28.12 - Opt-Out Provisions
§ 28.13 - - A Corporation Has General Business Purposes
§ 28.14 - - A Corporation Has Perpetual Existence and Certain Powers
§ 28.15 - - The Power to Adopt, Amend, or Repeal the Bylaws
Is Vested in the Board
§ 28.16 - - A Corporation Must Allow Cumulative Voting
for Directors
§ 28.17 - - The Affirmative Vote of a Majority of Directors
Present Is Required for an Action of the Board
§ 28.18 - - A Written Action by the Board Taken without a
Meeting Must Be Signed by All Directors
§ 28.19 - - The Board May Authorize the Issuance of Securities
and Rights to Purchase Securities
§ 28.20 - - All Shares Are Common Shares Entitled to Vote
and Are of One Class and One Series
§ 28.21 - - All Shares Have Equal Rights and Preferences in All
Matters Not Otherwise Provided for by the Board
§ 28.22 - - The Par Value of Shares Is Fixed at One Cent Per
Share for Certain Purposes and May Be Fixed by the
Board for Certain Other Purposes
§ 28.23 - - The Board or the Shareholders May Issue Shares for Any
Consideration or for No Consideration to Effectuate Share
Dividends, Divisions, or Combinations, and Determine
the Value of Nonmonetary Consideration
§ 28.24 - - Shares of a Class or Series May Not Be Issued to Holders
of Shares of Another Class or Series to Effectuate Share
Dividends, Divisions, or Combinations, Unless Authorized
by a Majority of the Voting Power of the Shares of the
Same Class or Series as the Shares to Be Issued
§ 28.25 - - A Corporation May Issue Rights to Purchase
Securities Whose Terms, Provisions, and Conditions
Are Fixed by the Board
§ 28.26 - - A Shareholder Has Certain Preemptive Rights,
Unless Otherwise Provided by the Board
§ 28.27 - - The Affirmative Vote of the Holders of a Majority
of the Voting Power of the Shares Present and Entitled
to Vote at a Duly Held Meeting Is Required for an
Action of the Shareholders, Except Where Minn.
Stat. § 302A Requires the Affirmative Vote of a
Majority of the Voting Power of All Shares Entitled
to Vote
§ 28.28 - - Shares of a Corporation Acquired by the Corporation
May Be Reissued
§ 28.29 - - Each Share Has One Vote Unless Otherwise Provided
in the Terms of the Share
§ 28.30 - - A Corporation May Issue Shares for a Consideration
Less Than the Par Value, If Any, of the Shares
§ 28.31 - - The Board May Effect Share Dividends, Divisions,
and Combinations under Certain Circumstances
without Shareholder Approval; in Other
Circumstances, Adoption by Both the Board
and the Shareholders Is Required
§ 28.32 - Optional Provisions
§ 28.33 - - The Members of the First Board May Be Named
in the Articles
§ 28.34 - - A Larger Than Majority Vote May Be Required
for Board Action
§ 28.35 - - A Larger Than Majority Vote May Be
Required for Shareholder Action
§ 28.36 - - Voting Rights May Be Granted to Persons Who
Are Not Shareholders
§ 28.37 - - A Director’s Personal Liability to the Corporation
or Its Shareholders for Monetary Damages for
Breach of Fiduciary Duty as a Director May Be
Eliminated or Limited
§ 28.38 - Provisions That Cannot Be Altered
§ 28.39 Corporate Control and Minority Rights
§ 28.40 Standard Drafting Practices
§ 28.41 Filing Process and Record Keeping
§ 28.42 Amendment Process
§ 28.43 - Common Amendments
§ 28.44 - Legal Effect
§ 28.45 - Amendment before Issuance of Shares
§ 28.46 - Amendment after Issuance of Shares
§ 28.47 - Special Amendment Provisions for Close Corporations
§ 28.48 - Amendments and Corporate Control
§ 28.49 - Articles of Amendment and Amendment Filing Process
§ 28.50 Restated Articles
§ 28.51 Articles of Correction
§ 28.52 Changes in Registered Office or Agent
§ 28.53 Certificate of Incorporation
Chapter 29 Bylaws
§ 29.01 Statutory Summary and Purpose of Bylaws
§ 29.02 Legal Effect - Separately
§ 29.03 - With Regard to Other Documents
§ 29.04 Authority to Adopt
§ 29.05 Contents
§ 29.06 - Common Provisions
§ 29.07 - Opt-Out Provisions
§ 29.08 - - Directors Serve for an Indefinite Term That Expires
at the Next Regular Meeting of the Shareholders
§ 29.09 - - The Compensation of Directors Is Fixed by the Board
§ 29.10 - - Certain Methods Must Be Used for Removal of
Directors and to Fill Board Vacancies
§ 29.11 - - If the Board Fails To Select a Place for a Board Meeting,
It Must Be Held at the Principal Executive Office
§ 29.12 - - A Director May Call a Board Meeting, and the
Notice of the Meeting Need Not State the Purpose
of the Meeting
§ 29.13 - - A Majority of the Board Is a Quorum for a
Board Meeting
§ 29.14 - - A Committee Shall Consist of One or More Persons,
Who Need Not Be Directors, Appointed by Affirmative
Vote of a Majority of Directors Present
§ 29.15 - - The Board May Establish a Special Litigation Committee
§ 29.16 - - The Chief Executive Officer and Chief Financial Officer
Have the Duties Specified by Statute, Until the
Board Determines Otherwise
§ 29.17 - - Officers May Delegate Some or All of Their Duties and
Powers, if Not Prohibited by the Board from Doing So
§ 29.18 - - The Board May Establish Uncertificated Shares
§ 29.19 - - Regular Meetings of Shareholders Need Not Be Held,
Unless Demanded by a Shareholder under Certain
Conditions
§ 29.20 - - In All Instances Where a Specific Minimum Notice
Period Has Not Otherwise Been Fixed by Law, Not
Less Than Ten Days’ Notice Is Required for a Meeting
of Shareholders
§ 29.21 - - The Number of Shares Required for a Quorum at a
Shareholders’ Meeting Is a Majority of the Voting Power
of the Shares Entitled to Vote at the Meeting
§ 29.22 - - The Board May Fix a Date up to Sixty Days before the
Date of a Shareholders’ Meeting as the Date for the
Determination of the Holders of Shares Entitled to
Notice of and Entitled to Vote at the Meeting
§ 29.23 - - Indemnification of Certain Persons Is Required
§ 29.24 - - The Board May Authorize, and the Corporation May
Make, Distributions Not Prohibited, Limited, or Restricted
by an Agreement
§ 29.25 - Optional Provisions
§ 29.26 - - Articles or Bylaws May Provide a Manner for Increasing
or Decreasing the Number of Directors
§ 29.27 - - Articles or Bylaws May Impose Additional Qualifications
for Directors
§ 29.28 - - Directors May Be Classified
§ 29.29 - - The Day or Date, Time, and Place of Board Meetings
May Be Fixed
§ 29.30 - - Absent Directors May Be Permitted to Give Written
Consent or Opposition to a Proposal
§ 29.31 - - Authority to Sign and Deliver Certain Documents May
Be Delegated to an Officer or Agent of the Corporation
Other Than the Chief Executive Officer
§ 29.32 - - Additional Officers May Be Designated
§ 29.33 - - Additional Powers, Rights, Duties, and Responsibilities
May Be Given to Officers
§ 29.34 - - A Method for Filling Vacant Offices May Be
Specified
§ 29.35 - - A Certain Officer or Agent May Be Authorized to
Sign Share Certificates
§ 29.36 - - The Transfer or Registration of Transfer of Securities
May Be Restricted
§ 29.37 - - The Day or Date, Time, and Place of Regular
Shareholder Meetings May Be Fixed
§ 29.38 - - Certain Persons May Be Authorized to Call Special
Meetings of Shareholders
§ 29.39 - - Notices of Shareholder Meetings May Be Required to
Contain Certain Information
§ 29.40 - - Corporate Actions Giving Rise to Dissenter Rights
May Be Designated
§ 29.41 - - The Rights and Priorities of Persons to Receive
Distributions May Be Established
§ 29.42 - - Other Options
§ 29.43 Corporate Control and Minority Rights
§ 29.44 Filing Process, if Applicable
§ 29.45 Record Keeping
§ 29.46 Amendment Process and Limitations on Repeal of Amendments
Chapter 30 The Organizational Meeting
§ 30.01 Statutory Summary and Purpose of Organizational Meeting
§ 30.02 Legal Effect
§ 30.03 Persons Who May Hold Meeting
§ 30.04 - Matters Which May Be Addressed
§ 30.05 - General Nature of Minutes of Organizational Meeting
Chapter 31 Shareholders’ Control Agreements and Other
Shareholder Agreements
§ 31.01 Statutory Summary and Purpose of Shareholder
Agreements
§ 31.02 Shareholder Voting Agreements
§ 31.03 Shareholder Control Agreements
§ 31.04 Shareholder Control Agreements - Requirements and
Legal Effect
§ 31.05 Shareholder Control Agreements - Common Provisions
§ 31.06 Other Shareholder Agreements
§ 31.07 Corporate Control and Minority Rights
Chapter 32 Proxies
§ 32.01 Purpose of Proxies
§ 32.02 Legal Effect
§ 32.03 Duration and Revocability
Chapter 33 Voting Trusts
§ 33.01 Statutory Summary and Purpose of Voting Trust
§ 33.02 Legal Effect
§ 33.03 Contents - Required Provisions
§ 33.04 Corporate Control and Minority Rights
§ 33.05 Record Keeping
Chapter 34 Observing Corporate Formalities
§ 34.01 Corporate Formalities
§ 34.02 Record Keeping
§ 34.03 Corporate Minutes
§ 34.04 Corporate Registration
§ 34.05 Doing Business
Chapter 35 Matters for Inclusion in Corporate Minutes
§ 35.01 What Are Minutes and What Purpose Do They Serve? -
Statutory Requirements
§ 35.02 - Best Evidence of Corporate Action and Authority
§ 35.03 - Provide Protection to Directors and Officers
§ 35.04 - Provide Protection against Creditors
§ 35.05 What Matters Should Be Documented in the Corporate
Minutes? - Minutes of Organizational Meeting
§ 35.06 - Minutes of Regular or Special Meetings
§ 35.07 - Management of the Corporation - Meetings
§ 35.08 - - Directors and Officers
§ 35.09 - - Appointment of Committees and Agents
§ 35.10 - - Contracts
§ 35.11 - Compensation of Directors, Officers, and Employees
§ 35.12 - Securities Issues and the Issuance and Sale of Stock
§ 35.13 - Dividends
§ 35.14 - Amendments of Articles of Incorporation
§ 35.15 Amendments of Bylaws
§ 35.16 - Borrowing and Lending on Behalf of the Corporation
§ 35.17 - Selling Substantially All of the Corporate Assets
§ 35.18 - Consolidation, Merger, Liquidation, and Dissolution
of a Corporation - Consolidation or Merger
§ 35.19 - - Liquidation and Dissolution
§ 35.20 - Corporate Acts and Decisions with Tax Ramifications
§ 35.21 - - Subchapter S Corporation Election
§ 35.22 - Qualified Pension/Benefit Plans
§ 35.23 - - Deferred Compensation /Nonqualified Plans
§ 35.24 - - Some Other Tax Elections Which Should Be
Carefully Documented
§ 35.25 Conclusion
Chapter 36 Law on Spousal Interests (and Liabilities) in Business
§ 36.01 Introduction
§ 36.02 Spousal Rights upon Dissolution of Marriage - General Law
§ 36.03 - Minnesota Law
§ 36.04 Do All Increases to Wealth Become Marital Property after
Marriage? - General Law
§ 36.05 - Minnesota Law
§ 36.06 - Exceptions
§ 36.07 Marital Property and Business Assets - General Law
§ 36.08 - Minnesota Law
§ 36.09 Prenuptial and Antenuptial Agreements
§ 36.10 Validity of Antenuptial Agreements on Dissolution of Marriage
§ 36.11 - Procedural Fairness Test
§ 36.12 - Substantive Fairness Test
§ 36.13 - Validity of Antenuptial Agreements on Death of Spouse
§ 36.14 Conclusion
PART III Operating the Business Enterprise
Chapter 37 Stock Transfers
§ 37.01 Stock Transfers
§ 37.02 Rights and Liabilities of the Parties
§ 37.03 Prescriptions and Proscriptions
§ 37.04 Security Regulations
Chapter 38 Endorsements and Restrictions, Rights of Transferee,
and Fraudulent Endorsement
§ 38.01 Endorsements and Restrictions
§ 38.02 Unauthorized Endorsement
Chapter 39 Dividends and Cash Distribution
§ 39.01 Definition of Dividends
§ 39.02 Dividends and Cash
§ 39.03 Federal Taxation of Dividends
Chapter 40 Noncash Dividends and Distributions
§ 40.01 Noncash Dividends and Distributions
§ 40.02 Federal Income Tax Treatment of Stock Dividends
Chapter 41 Continued Filing Requirements
§ 41.01 Continued Filing Requirements
§ 41.02 Articles of Correction
§ 41.03 Share Register
§ 41.04 Annual Filing of Registration
§ 41.05 Securities Registration Requirements
§ 41.06 Tender Offer Filing Requirements
§ 41.07 Inspection and Maintenance of Corporate Records
§ 41.08 Employment Law Reporting Requirements
§ 41.09 Sale of Control Reporting Requirements
§ 41.10 Tax Reporting Requirements
§ 41.11 Filing Requirements and “Piercing the Corporate Veil”
§ 41.12 Rights of Shareholder to Inspect
§ 41.13 Purpose of Inspection
Chapter 42 Right to Attend Director, Shareholder,
and Executive Committee Meetings
§ 42.01 Director Meetings
§ 42.02 Committee Meetings
§ 42.03 Shareholder Meetings - Regular Shareholder Meetings
§ 42.04 - Special Shareholder Meetings
§ 42.05 Shareholder Notice
Chapter 43 Duties of Majority Shareholders; Shareholder Rights
§ 43.01 Introduction
§ 43.02 Closely Held Corporations
§ 43.03 Risk of Oppression of Minority Shareholders
§ 43.04 Obligations/Duties of Majority Shareholder/Partner
and Majority Shareholder/Director
§ 43.05 “Fundamental Corporate Actions” and Legal
Proscriptions and Prescriptions Regarding Same
§ 43.06 Mergers and Exchanges of Assets
§ 43.07 Rights of Creditors at Time of Fundamental Actions
Chapter 44 Corporate Opportunity Doctrine in the State of Minnesota,
Other Jurisdictions and Foreign Countries
§ 44.01 Introduction
§ 44.02 Tests for Recovery
§ 44.03 Rights of Fiduciaries
§ 44.04 Safe Harbor
§ 44.05 Consequence of Breach
§ 44.06 Minnesota Law
§ 44.07 Delaware Law
§ 44.08 Corporate Opportunity Doctrine outside of the United States
§ 44.09 - United Kingdom
§ 44.10 - Canada
§ 44.11 - Australia
§ 44.12 - China and Japan
Chapter 45 Securities Law Issues after Initial Formation Stage
§ 45.01 What Is a “Security”?
§ 45.02 Why Regulate Securities?
§ 45.03 The Securities Act of 1933
§ 45.04 - Exemptions from the 1933 Act’s Registration Requirements
§ 45.05 The Securities Exchange Act of 1934
§ 45.06 State Blue Sky Laws
§ 45.07 Civil Liabilities under the 1933 Act
Chapter 46 Issues Surrounding Issuance of Shares and Securities
§ 46.01 Authorization
§ 46.02 Technical Recording and Record Keeping and
Reporting Requirements
§ 46.03 Stock Redemptions and Liquidations - Stock Redemptions
§ 46.04 Preemptive Rights
§ 46.05 Dissolution
§ 46.06 - Voluntary Dissolution by Shareholders
Chapter 47 Some Special Problems of Publicly Held Corporations
in Minnesota
§ 47.01 An Overview of the Publicly Held Corporation’s Legal Setting
§ 47.02 Federal Legislation
§ 47.03 Minnesota Statutes
§ 47.04 Registration Requirements
§ 47.05 Definition of Securities
§ 47.06 Registration Statements
§ 47.07 Reporting Requirements
§ 47.08 Insider Trading and Insider Information
§ 47.09 Outside Directors
§ 47.10 Parent/Subsidiary Relationships
§ 47.11 Tender Offers/Proxy Contests
§ 47.12 Directors’ and Officers’ Self-Dealing
§ 47.13 Williams Act
§ 47.14 Registration and Assertion of Rights
§ 47.15 Inspection of Records
§ 47.16 Employment Law
§ 47.17 Cumulative Voting
§ 47.18 Sale of Control
§ 47.19 Unfairness, Oppression, and Fraud
§ 47.20 Takeover and Defense Tactics in Response to Takeovers
§ 47.21 The “Poison Pill” Defense
Chapter 48 Some Special Problems of Closely Held Corporations
§ 48.01 Overview of the Closely Held Corporation Legal Setting
§ 48.02 Deadlock and Dissension, Relatives, and Family Discord
§ 48.03 Shareholder Direct Liability
§ 48.04 Valuations of Shares
§ 48.05 Difficulty of Disposing of Share Interests
§ 48.06 Failure to Keep Records
§ 48.07 The Internal Revenue Service, Minnesota Department
of Revenue, and Central Person Concepts
Chapter 49 Employment Law and the Ongoing Corporation
§ 49.01 Introduction
§ 49.02 Labor Law and the Ongoing Corporation
§ 49.03 Inherited Employment Agreements
§ 49.04 Inherited Employment Liability
§ 49.05 WARN: Plant Closings, Mass Layoffs, and Business Relocations
Chapter 50 Foreign Trade Law, Treaties and Other Issues
Surrounding the Marketing and Sale of Minnesota
Corporation Products and Services, as well as the
Purchasing of Products and Services from Foreign
Persons, Entities or Governmental Authorities
§ 50.01 Introduction
§ 50.02 International Trade Organizations
§ 50.03 - The Bretton Woods System
§ 50.04 - GATT/GATS
§ 50.05 - World Trade Organization
§ 50.06 Treaties and International Agreements - North American
Free Trade Agreement (NAFTA)
§ 50.07 - Other Free Trade Agreements
§ 50.08 - - CAFTA-DR
§ 50.09 - - FTAs with Other Countries
§ 50.10 - Mercosur
§ 50.11 - European Union
§ 50.12 Statutes, Regulations, and Administrative Materials -
Export Administration Regulations
§ 50.13 - Foreign Corrupt Practices Act
§ 50.14 - FDA Restrictions
§ 50.15 - - Cosmetics
§ 50.16 - - Drugs and Medical Devices
§ 50.17 - - Food
§ 50.18 - EU Laws
§ 50.19 - - Food Law
§ 50.20 - - EU Standards and CE Certification
§ 50.21 - Competition Laws
§ 50.22 Approaches to Exporting and Importing
§ 50.23 - Form of Relationship
§ 50.24 - - Independent Foreign Agent
§ 50.25 - - Independent Foreign Distributor
§ 50.26 - - Concerns Regarding Termination of the Relationship
§ 50.27 - - Other Legal Concerns
§ 50.28 - Export Trading Companies
§ 50.29 - Piggyback Marketing
§ 50.30 - Direct Sales to End Users
§ 50.31 - International Franchising
§ 50.32 Terms of Sale - UN Convention on Contracts for the
International Sale of Goods
§ 50.33 - UCC
§ 50.34 - - Scope of Coverage
§ 50.35 - - Battle of the Forms
§ 50.36 - - Statute of Frauds
§ 50.37 - - Perfect Tender Rule
§ 50.38 - - Parol Evidence Rule
§ 50.39 - Incoterms
§ 50.40 - Dispute Resolution
§ 50.41 - - Enforcement of Foreign Judgments
§ 50.42 - - International Arbitration
§ 50.43 - - Where to Go for International Arbitration
§ 50.44 Intellectual Property Considerations
§ 50.45 Cultural Factors
Chapter 51 Executive Officer, Director, and Employment Compensation
§ 51.01 Introduction
§ 51.02 Granting Compensation
§ 51.03 Deductibility of Compensation under Section 162(m)
§ 51.04 Cash-Based Compensation
§ 51.05 - Short-Term Cash Incentive Compensation
§ 51.06 - Long-Term Cash Incentive Compensation
§ 51.07 Equity-Based Compensation
§ 51.08 - Stock Options
§ 51.09 - - Incentive Stock Options
§ 51.10 - - Non-Qualified Stock Options
§ 51.11 - Stock Appreciation Rights
§ 51.12 - Restricted Stock
§ 51.13 - Stock Purchase Programs
§ 51.14 - Phantom Stock Plans
§ 51.15 Qualified Deferred Compensation
§ 51.16 Non-Qualified Deferred Compensation
§ 51.17 Fringe Benefits
§ 51.18 Change-in-Control Arrangements
§ 51.19 Executive Compensation Disclosure
Chapter 52 The Purchase and Sale of a Business: Preliminary Checklists
§ 52.01 Introduction
§ 52.02 The Role of Attorney during Preclosing and Due Diligence Phase
§ 52.03 Some Specific Considerations for Dealing with Brokers,
and Provisions of Actual Brokerage Agreement
§ 52.04 Broker Services
§ 52.05 Broker Fees and Expenses
§ 52.06 Broker and Agency Exclusivity
§ 52.07 Nondisclosure or Confidentiality Considerations
§ 52.08 Suggestive Checklist of Matters to Be Considered Prior
to Actual Entry into a Purchase Agreement
§ 52.09 Suggestive Checklist for Dealing with Broker (or Intermediary)
and Provisions of Actual Brokerage Agreement
§ 52.10 Suggestive Checklist of Categories of Information of
Business, and Types of Information to Be Included in
Due Diligence Process
§ 52.11 Notice on Liability Assumption and Tax Issues
§ 52.12 Conclusion
Chapter 53 Mergers and Reorganizations
§ 53.01 Mergers and Reorganizations
§ 53.02 Minnesota Takeover Law
§ 53.03 - Administration, Rules, and Orders
§ 53.04 - Injunctive Relief
§ 53.05 - Penalties
§ 53.06 - Civil Liabilities
§ 53.07 Antitrust Aspects
§ 53.08 Tax Aspects
§ 53.09 Methods of Blocking Mergers and Reorganizations
Chapter 54 Corporate Management and Authority Structure
§ 54.01 Who May Be a Director?
§ 54.02 Board of Directors - The Directors’ Meeting
§ 54.03 - Notice of Meeting of Board of Directors
§ 54.04 - Validity of Actions of Board of Directors
§ 54.05 Committees - Committee Meetings
§ 54.06 Shareholders - The Shareholders Meeting
§ 54.07 - Notice of Meeting of Shareholders
§ 54.08 - Agenda of Meeting of Shareholders
§ 54.09 - Validity of Actions of Shareholders
Chapter 55 Financial and Other Contributions of Minnesota
Corporations, Shareholders, Officers, and Directors
to Civic Organizations and to Politically Related
Organizations; Campaign Contributions
§ 55.01 Restrictions on Corporate Political Activities under Minnesota Law
§ 55.02 Permitted Corporate Political Activities under Minnesota Law
§ 55.03 Restrictions on Corporate Political Activities under Federal Law
§ 55.04 Corporate Campaign Contributions and Independent Expenditures
§ 55.05 “Electioneering Communications”
§ 55.06 Soft Money
§ 55.07 Restrictions on Political Activities of Tax Exempt Corporations
Chapter 56 Directors’ and Officers’ Liability and Insurance Coverage
§ 56.01 Legal Liability Exposure for Directors and Officers
§ 56.02 Directors’ and Officers’ (D & O) Liability Insurance
§ 56.03 - Components of D & O Coverage
§ 56.04 - Premiums
Chapter 57 Review of Mode of Execution of Formalized
Corporation Documentation and Resultant Liabilities
§ 57.01 Introduction
§ 57.02 Agency Relationship
§ 57.03 Scope or Limits of Officer’s/Director’s Authority by Corporation
§ 57.04 Definition of Implied and Apparent Authority
§ 57.05 Statute of Frauds
§ 57.06 Statutory Provisions
Chapter 58 Use of Agents in the Corporation’s Legal and Operational Setting
§ 58.01 Introduction
§ 58.02 Definition of Agency
§ 58.03 Acts of Agent
§ 58.04 Authority of Agent
§ 58.05 - Express Authority
§ 58.06 - Implied Authority
§ 58.07 - Apparent Authority
§ 58.08 Estoppel
§ 58.09 Agency by Estoppel versus Agency by Implied Appointment
§ 58.10 Ratification
§ 58.11 - Validity of Ratification
§ 58.12 - Unauthorized Act of an Agent
§ 58.13 - Ratification in Whole
§ 58.14 - Power of Corporation to Ratify
§ 58.15 Agents in International Commerce
Chapter 59 Major Employment Law Issues
§ 59.01 Advertisement and Initial Interview - Introduction
§ 59.02 Advertisements
§ 59.03 Supervision
§ 59.04 Documentation Issues
§ 59.05 Equal Opportunity and Fair Employment Practices
§ 59.06 Employment at Will Doctrine - Introduction
§ 59.07 Contractual Exceptions
§ 59.08 Public Policy Exceptions
§ 59.09 Independent Consideration
§ 59.10 Promissory Estoppel
§ 59.11 Implied Covenants
§ 59.12 Covenants Not to Compete - Introduction
§ 59.13 Covenants Not to Compete in Employment Contracts
§ 59.14 Employment Covenants under Minnesota Law
§ 59.15 Covenants Not to Compete in the Sale of Businesses
§ 59.16 Enforcement and Damages
§ 59.17 Some Drafting Considerations
§ 59.18 Nondisclosure of Confidential Information - Introduction
§ 59.19 Nondisclosure Covenants under Minnesota Law
§ 59.20 Termination - Exceptions to the Employment at Will Doctrine
§ 59.21 Due Process
§ 59.22 Employee’s Rights at Termination
§ 59.23 Factors to Consider in the Termination Process
§ 59.24 Foreign Labor Issues
Chapter 60 Labor Law Issues
§ 60.01 History and Introduction to Labor Law
§ 60.02 Overview
§ 60.03 NLRB or BMS Operations - The NLRB Role
§ 60.04 The Federal Court Role
§ 60.05 The BMS Role
§ 60.06 Protected Concerted Activity
§ 60.07 Unfair Labor Practices
§ 60.08 By the Employer
§ 60.09 By the Union
§ 60.10 Remedies for Unfair Labor Practices
§ 60.11 Procedures in Unfair Labor Practice Cases
§ 60.12 Bargaining Units
§ 60.13 Categories of Employees
§ 60.14 Determining Appropriate Bargaining Units
§ 60.15 Common Bargaining Unit Issues
§ 60.16 Union Organizing Activity - Campaigns and Elections
§ 60.17 Petitioning for Election
§ 60.18 Denying Elections
§ 60.19 The Election
§ 60.20 Postelection Appeals
§ 60.21 Relationship of Unfair Labor Practices to Election Objections
§ 60.22 Negotiating and Administering Collective Bargaining
Agreements - Duty to Bargain
§ 60.23 Union’s Duty of Fair Representation
§ 60.24 Good Faith Bargaining
§ 60.25 Subjects of Bargaining
§ 60.26 Resolving Contractual Disputes
§ 60.27 Purchase and Sale of a Business - Closure or Sale
§ 60.28 Effects Bargaining
§ 60.29 Successorship
§ 60.30 Dual or Double-Breasted Employers
§ 60.31 Bankruptcy and Labor Law
§ 60.32 The Bildisco Decision
§ 60.33 Congressional Response to Bildisco
§ 60.34 Employee Claims against Bankrupt Employer
Chapter 61 Products Liability Law
§ 61.01 Introduction
§ 61.02 Privity of Contract
§ 61.03 Bases for Causes of Action
§ 61.04 Liability of Suppliers
§ 61.05 Manufacturer’s Duty to Warn
§ 61.06 Strict Liability Actions
§ 61.07 - Defense to Strict Liability Actions
§ 61.08 - - Federal Preemption
§ 61.09 - - Statutes of Limitation and Useful Safe Life
Chapter 62 Brief Review of Minnesota Law of Sales under Uniform Commercial Code for Common Corporate Transactions
§ 62.01 Introduction
§ 62.02 Transactions Covered under the UCC
§ 62.03 Goods Covered by the UCC
§ 62.04 UCC Provisions Regarding Contract Formation
§ 62.05 UCC Provisions Regarding Obligations of Parties and
Construction of Contracts
Chapter 63 Minnesota Uniform Commercial Code Provisions
Regarding the Validity of Promissory Notes
§ 63.01 Negotiable Instruments Generally
§ 63.02 Signed by Maker Requirement
§ 63.03 Unconditional Promise Requirement
§ 63.04 Payable on Demand or at a Definite Time Requirement
§ 63.05 Payable to Order or to Bearer Requirement
Chapter 64 Minnesota Uniform Commercial Code Provisions
Regarding Other Negotiable Instruments and Bank
Practices, Checks, Drafts, and Letters of Credit
§ 64.01 Negotiable Instruments Generally
§ 64.02 Checks
§ 64.03 Drafts
Chapter 65 Minnesota and Federal Law Regarding Secured Interests
§ 65.01 Introduction
§ 65.02 Definition of Secured Interest
§ 65.03 Requirements for Validity
§ 65.04 Purpose of Security Interest
§ 65.05 Filing of Financing Statements
§ 65.06 Priorities When Conflicting Interests Exist
Chapter 66 Debt Collection Practices and Credit Reporting
under Minnesota and Federal Law
§ 66.01 Debt Collection
§ 66.02 Credit Reporting
Chapter 67 Liabilities to Creditors of Corporations
§ 67.01 Introduction
§ 67.02 Personal Liability of Authorized Representative
§ 67.03 Loans to Corporation by Directors and Officers
§ 67.04 Ultra Vires Contracts
§ 67.05 Burden of Proof of Fraud
Chapter 68 Corporate Marketing and Distribution Networks
§ 68.01 Common Forms of Distribution of Goods and Services,
and Legal Consequences Generally
§ 68.02 Distribution Channels
§ 68.03 - Agents
§ 68.04 - Wholesalers
§ 68.05 - Retailers
§ 68.06 Licensing
§ 68.07 Franchising
§ 68.08 Statutory Law Implications - Federal Laws and Regulations
§ 68.09 - Minnesota Regulation
§ 68.10 - Sales Representatives
§ 68.11 - Franchises
Chapter 69 Antitrust
§ 69.01 Overview and Basic Premises
§ 69.02 Horizontal Restraints
§ 69.03 - Requirement of Joint Conduct
§ 69.04 - Per Se Offenses
§ 69.05 - Rule of Reason Analysis
§ 69.06 Vertical Restraints
§ 69.07 - Price Restraints
§ 69.08 - Non-Price Restraints
§ 69.09 Tying Arrangements
§ 69.10 Requirements Contracts
§ 69.11 Monopolization
§ 69.12 - Market Definition and Market Power
§ 69.13 - Acquisition or Maintenance of a Monopoly
§ 69.14 - Predatory Pricing and Other Forms of Attempted
Monopolization
§ 69.15 Mergers and Acquisitions
§ 69.16 - Procedural Requirements under Hart-Scott-Rodino
§ 69.17 - Exemptions and Defenses
§ 69.18 State Action
§ 69.19 - Petitioning the Government
§ 69.20 - Price Discrimination
§ 69.21 Essential Elements
§ 69.22 - Defenses
§ 69.23 - Minnesota Antitrust Laws
§ 69.24 Public Enforcement Agencies
§ 69.25 Private Actions
Chapter 70 Law of Advertising
§ 70.01 Introduction
§ 70.02 Constitutional Protection of Commercial Speech
§ 70.03 Civil Rights Considerations
§ 70.04 Prohibited Advertisements
§ 70.05 Advertisements for Commercial Purposes
§ 70.06 Federal Regulation of Deceptive Advertisement
§ 70.07 Prevention of Consumer Fraud Act
§ 70.08 Deceptive Trade Practices Act
Chapter 71 International Law Issues
§ 71.01 Introduction
§ 71.02 What Is International Law?
§ 71.03 Contractual Terms
§ 71.04 - Language of the Contract
§ 71.05 - Choice of Law, Forum, and Venue Clauses
§ 71.06 Minnesota Business Involved in International Trade -
The Decision to Pursue Foreign Opportunities
§ 71.07 - The Role of the “Trade Facilitator”
§ 71.08 - Agency and Distribution Arrangements
§ 71.09 Defining Some Terms - What Is an Agent?
§ 71.10 - What Is a Distributor?
§ 71.11 Some Advantages of Agency/Distributor Relationship - Agent
§ 71.12 - Distributor
§ 71.13 Some of the Disadvantages - Agent
§ 71.14 - Distributor
§ 71.15 Elements of the Agreement
§ 71.16 - Contract in Writing
§ 71.17 - Letter of Intent
§ 71.18 - Significant Terms of the Contract
§ 71.19 - Specific Terms Particular to Agency Agreements
§ 71.20 - Specific Terms Particular to Distributor Agreements
§ 71.21 Joint Ventures
§ 71.22 Formation of Foreign Subsidiary
§ 71.23 Intellectual Property in the International Arena
§ 71.24 - International Protection of Intellectual Property
§ 71.25 - Copyright
§ 71.26 - Patent
§ 71.27 - Trademarks
§ 71.28 - Trade Secrets
§ 71.29 - Copyright under the Berne Convention
§ 71.30 - Other International Copyright Treaty Rights
§ 71.31 - Copyright Infringement
§ 71.32 - Assignment of Copyright
§ 71.33 - International Software Copyright
§ 71.34 - International Patent Issues
§ 71.35 - International Trade and Service Marks Issues
§ 71.36 - International Trade Secrecy Law Issues
§ 71.37 - Protection and Prevention in General
§ 71.38 Sale of Goods Contracts
§ 71.39 - Delivery Terms
§ 71.40 - Force Majeure
§ 71.41 - Penalty Clauses
§ 71.42 - Choice of Law
§ 71.43 - Taxes, Tariffs, and Government Approvals
§ 71.44 - Payment
§ 71.45 - Notices
§ 71.46 - Dispute Resolution
§ 71.47 - United Nations Convention on Sale of Goods
§ 71.48 Countertrade Arrangements
§ 71.49 - Legal Considerations of Countertrade
§ 71.50 Product Liability
§ 71.51 Customs, Excise, and Tariffs
§ 71.52 North American Developments
§ 71.53 The Import Process
§ 71.54 The Export Process
§ 71.55 - Harmonized Tariff Schedule
§ 71.56 - Avoidance Schemes
§ 71.57 - Export Licensing and Control
§ 71.58 Antiboycott Laws
§ 71.59 Foreign Corrupt Practices Act
§ 71.60 Immigration Issues
§ 71.61 Some International Antitrust and Competition Considerations
§ 71.62 Methods of Payment
§ 71.63 Letters of Credit
§ 71.64 - Wire Transfer of Funds
§ 71.65 - Reporting Requirements
§ 71.66 Taxation
§ 71.67 International Litigation
§ 71.68 - Contractual Forum Clause
§ 71.69 - Jurisdiction of the Court
§ 71.70 - Forum Non Conveniens
§ 71.71 - Choice of Law
§ 71.72 - Discovery Procedures
§ 71.73 - Service on Foreign Parties
§ 71.74 - Enforcement of Judgments
§ 71.75 - - Enforcement of Foreign Judgments in the United States
§ 71.76 - - Enforcement of U.S. Judgments in Foreign Countries
§ 71.77 Sovereign Immunity
§ 71.78 Alternative Dispute Resolution (ADR)
§ 71.79 Advising Foreign Organizations Doing Business in
Minnesota - Formation of the Relationship
§ 71.80 - Corporations
§ 71.81 - General and Limited Partnerships
§ 71.82 - Limited Liability Companies
§ 71.83 Statutory Restrictions on Foreign Operations in Minnesota
§ 71.84 - Exon-Florio Amendment
§ 71.85 Other Foreign Business in Minnesota - Sales Representatives
§ 71.86 - Distributors
§ 71.87 - Franchises
§ 71.88 Conclusion
Chapter 72 OSHA
§ 72.01 Federal OSHA
§ 72.02 State Enforcement of OSHA
§ 72.03 Minnesota OSHA
§ 72.04 Inspection of Places of Employment
§ 72.05 Employer Consent to Inspection
§ 72.06 Notification to Employer of Violations
§ 72.07 Employer’s Rights and Duties
§ 72.08 Employee Rights and Duties
Chapter 73 Tax Issues in Operating a Corporation after
Initial Formation Stage
§ 73.01 Corporate Tax Returns and Tax Procedure:
Return Filing Requirements
§ 73.02 - Statute of Limitations
§ 73.03 - Audit and Assessment of Tax Returns
§ 73.04 - Selection of Returns for Audit
§ 73.05 - The Audit Process
§ 73.06 - Scope of the Audit
§ 73.07 - Results of the Audit
§ 73.08 - Agreement with the Proposed Changes
§ 73.09 - Disagreement with the Proposed Changes
§ 73.10 - Partial Agreement and Partial Disagreement
§ 73.11 - The IRS Appeals Process
§ 73.12 - Litigation
§ 73.13 - Tax Court
§ 73.14 - District Court
§ 73.15 - Claims Court
§ 73.16 - Choice of Forum Decision
§ 73.17 Choice of Accounting Period - Corporation
§ 73.18 - S Corporation
§ 73.19 Deducting Organizational Expenses - Corporation
§ 73.20 Who Is the Taxpayer? - Corporation
§ 73.21 - S Corporation
§ 73.22 Operating Losses - Corporation
§ 73.23 - S Corporation
§ 73.24 Additional Taxes - Corporation
§ 73.25 - S Corporation
§ 73.26 Tax Rates - Corporation
§ 73.27 - S Corporation
§ 73.28 Employee Compensation Issues - Corporation
§ 73.29 - Tax Qualified Retirement Plans
§ 73.30 Group-Term Life Insurance - Corporation
§ 73.31 - S Corporation
§ 73.32 Medical Plans - Corporation
§ 73.33 Sale of the Business - Corporation
§ 73.34 Tax-Free “Sale of the Business” - Corporation
§ 73.35 Liquidation of the Business - C Corporation
§ 73.36 - S Corporation
Volume Three
PART IV Corporate Litigation and Liability
Chapter 74 Nature of Corporate Personality
§ 74.01 Overview
§ 74.02 The Artificial Person Theory
§ 74.03 Corporate Powers
§ 74.04 Corporate Powers - Ultra Vires Doctrine
§ 74.05 Constitutional Rights
§ 74.06 Special Restrictions and Obligations of Corporations
§ 74.07 Limited Liability of Shareholders
§ 74.08 Disregard of the Corporate Form - Piercing the Corporate Veil
Chapter 75 Federal and State Legal System as It Affects Corporations
§ 75.01 Introduction
§ 75.02 Fundamental Considerations - Prerequisites
§ 75.03 Power/Capacity
§ 75.04 Common Law
§ 75.05 Federal Courts
§ 75.06 Standing
§ 75.07 Applicability of the Constitution and Statutes - U.S. Constitution
§ 75.08 - Statutes
§ 75.09 Model Business Corporation Act
§ 75.10 Small Business Investment Act
§ 75.11 The Corporate Employer
§ 75.12 Securities and Trade Regulation
§ 75.13 Intellectual Property, Franchise, and Consumer Protection
§ 75.14 Uniform Commercial Code
§ 75.15 Environmental Laws
§ 75.16 Bankruptcy Code
§ 75.17 RICO and State “RICO”
Chapter 76 Federal and State Administrative Law System
as It Affects Corporations
§ 76.01 Administrative Law
§ 76.02 Administrative Procedures Act
§ 76.03 Administrative Hearings
§ 76.04 Judicial Review
Chapter 77 Civil Procedure Issues
§ 77.01 Civil Procedure
§ 77.02 - Jurisdiction
§ 77.03 - Subject Matter Jurisdiction
§ 77.04 - Personal Jurisdiction
§ 77.05 - Venue
§ 77.06 - Process
§ 77.07 - Special Evidentiary Problems for Corporations
§ 77.08 - Business Records
Chapter 78 Duties of Legal Counsel at the Commencement
or during the Prosecution of Litigation
§ 78.01 Attorney-Client Privilege
§ 78.02 Minnesota Rules of Professional Conduct, Rule 1.13
§ 78.03 Derivative Litigation
§ 78.04 Shareholder Disputes
§ 78.05 Parent-Subsidiary Disputes
§ 78.06 Former Shareholders’, Officers’, and Directors’
Suits against the Corporation
Chapter 79 Shareholder Derivative Actions and Related Shareholder Suits
§ 79.01 Derivative Actions
§ 79.02 Authorization of Derivative Suits
§ 79.03 Requirements for Derivative Suits
§ 79.04 - Enforcement of Corporate Right
§ 79.05 - Stock Ownership
§ 79.06 - Demand on Corporation
§ 79.07 - Fair Representation
§ 79.08 - Dismissal and Compromise
§ 79.09 - Attorneys’ Fees
§ 79.10 Direct Shareholder Suit
Chapter 80 Common Theories of Liability Asserted in
Commercial Litigation Involving Corporations
§ 80.01 Introduction
§ 80.02 Respondeat Superior
§ 80.03 Agency
§ 80.04 Antitrust Violations
§ 80.05 Securities Violations
§ 80.06 RICO
Chapter 81 Indemnification of Litigation Costs in Corporate Litigation
§ 81.01 Introduction
§ 81.02 Successful Derivative Plaintiffs
§ 81.03 Derivative Defendants
§ 81.04 Other Defenses for Which Indemnification Is Available
§ 81.05 Expenses/Proceeding
§ 81.06 Indemnification
§ 81.07 Public Policy
§ 81.08 Elements
§ 81.09 Procedure
§ 81.10 Insurance
Chapter 82 Actions against Directors and Officers
§ 82.01 Duties of Directors and Officers
§ 82.02 - Duty of Care
§ 82.03 - Good Faith
§ 82.04 - Business Judgment Rule
§ 82.05 - Best Interests
§ 82.06 - Reasonable Belief/Ordinary Care
§ 82.07 - Reliance
§ 82.08 - Duty of Loyalty
§ 82.09 - Self-Dealing
§ 82.10 - Corporate Opportunity
§ 82.11 Enforcing Statutory Rights
§ 82.12 - Consideration for Shares
§ 82.13 - Right to Dividends
§ 82.14 - Right to Inspect Books
§ 82.15 - Shareholder Preemptive Rights
§ 82.16 - Right to Vote
§ 82.17 - Dissolution
§ 82.18 Breach of Common-Law Rights
§ 82.19 Statutory Limitation of Liability
Chapter 83 Statutes of Limitations
§ 83.01 Defenses
§ 83.02 Statutes of Limitations
Chapter 84 Arbitration and Other Alternative Dispute Resolution Options
§ 84.01 Introduction
§ 84.02 Negotiation
§ 84.03 Mediation
§ 84.04 Arbitration
§ 84.05 - Private Arbitration
§ 84.06 - Court-Annexed Arbitration
§ 84.07 Uniform Arbitration Act
§ 84.08 Federal Arbitration Act
§ 84.09 Compulsory Arbitration
§ 84.10 Mini-Trials
§ 84.11 Private Judges
§ 84.12 Summary Jury Trial
Chapter 85 RICO
§ 85.01 Introduction
§ 85.02 Offenses
§ 85.03 - Investment of Racketeering Proceeds
§ 85.04 - Acquisition or Maintenance of Interest in Enterprise
through Racketeering
§ 85.05 - Participation in Enterprise Affairs through Racketeering
§ 85.06 - Conspiracy to Violate RICO
§ 85.07 - Racketeering Activity
§ 85.08 - Enterprise
§ 85.09 - Pattern
§ 85.10 - Interstate Commerce
§ 85.11 Penalties
§ 85.12 - Imprisonment
§ 85.13 - Forfeiture
§ 85.14 - Civil RICO
Chapter 86 White Collar Crime
§ 86.01 Introduction
§ 86.02 Corporate Officer Liability
§ 86.03 Substantive Crimes
§ 86.04 - Embezzlement
§ 86.05 - False Statements
§ 86.06 - False Entries
§ 86.07 - Bank Fraud
§ 86.08 - - Crimes by Bank Employees
§ 86.09 - - Crimes by Bank Customers
§ 86.10 - - Bank Fraud Summary
§ 86.11 - Bribery
§ 86.12 - Mail and Wire Fraud
§ 86.13 Obstruction of Justice
§ 86.14 Environmental Crimes - Clean Water Act
§ 86.15 - Clean Air Act
§ 86.16 - Miscellaneous
§ 86.17 Miscellaneous State Crimes
Chapter 87 Environmental Law
§ 87.01 Introduction
§ 87.02 Administrative Procedures Act Applies
§ 87.03 EPA Decisions Subject to Judicial Review
§ 87.04 Liability under Environmental Law
§ 87.05 Civil Liability
§ 87.06 Clean Water Act
§ 87.07 Resource Conservation and Recovery Act
§ 87.08 Hazardous Wastes
§ 87.09 - Comprehensive Environmental Response, Compensation
and Liability Act
§ 87.10 - Minnesota Environmental Response and Liability Act
§ 87.11 Toxic Substances Control Act
§ 87.12 - Federal Insecticide, Fungicide, and Rodenticide Act
§ 87.13 - Clean Air Act
§ 87.14 Practical Pointers
Chapter 88 Suits Involving Employment Law
§ 88.01 Suits by Employees
§ 88.02 Employment Doctrines in Case Law
§ 88.03 Administering Employment Arrangements
§ 88.04 Employment after Corporate Reorganizations
§ 88.05 Employment Discrimination Suits
§ 88.06 Employment Policy Administration
Chapter 89 Indemnification of Officers and Directors
§ 89.01 Indemnification and Insurance
§ 89.02 Insurance
Chapter 90 Class Action Principles in Commercial
Litigation Involving Corporations
§ 90.01 Introduction
§ 90.02 Requirements for a Class Action Suit
Chapter 91 Suits by Creditors
§ 91.01 Actions by Creditors
§ 91.02 Disregarding Corporate Form
§ 91.03 Corporate Dissolution
§ 91.04 Personal Guarantees
§ 91.05 Personal Torts
§ 91.06 Shareholder Creditors
§ 91.07 Statute of Frauds Regarding Credit Agreement
§ 91.08 Other Claims
Chapter 92 Government Civil Actions
§ 92.01 Introduction
§ 92.02 Government Contracts
§ 92.03 Zoning Issues
§ 92.04 Civil Environmental Enforcement Actions
§ 92.05 Eminent Domain
Chapter 93 Liability of Corporate Professionals
§ 93.01 Introduction
§ 93.02 Corporate Counsel
§ 93.03 - Liability to Nonclients
§ 93.04 - Malpractice Standards
§ 93.05 - Breach of Fiduciary Duty, Including Conflict of Interest
§ 93.06 Corporate Accountants
§ 93.07 - Liability to Nonclients
§ 93.08 - Malpractice Standards
§ 93.09 - Breach of Fiduciary Duty
Chapter 94 Actions Taken by Corporations Prior to Lawsuit
§ 94.01 Corporate Hygiene
§ 94.02 Potential Claims
Chapter 95 Actions Taken by Corporations after Litigation
§ 95.01 Introduction
§ 95.02 Tax Treatment of Awards
§ 95.03 Parties to the Settlement
§ 95.04 Enforcement of the Settlement
§ 95.05 Confidentiality and Nondisclosure
§ 95.06 Ratifications
§ 95.07 Attorneys’ Liens
Chapter 96 Managing Multijurisdictional Litigation
§ 96.01 Introduction
§ 96.02 Necessity of Coordination
§ 96.03 Developing the Plan
§ 96.04 Choosing Coordinating Counsel
§ 96.05 In-House Counsel as the Coordinator
§ 96.06 Outside Counsel as Coordinator
Chapter 97 Director Liability
§ 97.01 Introduction
§ 97.02 To Shareholder or Corporation
§ 97.03 Tort Victims
§ 97.04 Breach of Contract
§ 97.05 Antitrust Statutes
§ 97.06 Tax Liability
§ 97.07 Securities Laws Violations
§ 97.08 Environmental Laws
Chapter 98 Corporate Ombudsmen
§ 98.01 Introduction
§ 98.02 What Is an Ombudsman?
§ 98.03 Who Should Fill the Role of an Ombudsman?
Chapter 99 Tax Fraud and Evasion
§ 99.01 Introduction
§ 99.02 Criminal Tax Statutes - Tax Evasion
§ 99.03 - False Tax Return
§ 99.04 - Failure to File
§ 99.05 Methods of Proof
§ 99.06 - Specific Items Method
§ 99.07 - Bank Deposits Method
§ 99.08 - Net Worth and Expenditures Method
§ 99.09 Practice Pointers
Chapter 100 Tax Treatment of Litigation Awards
§ 100.01 Basic Rule
§ 100.02 Exceptions
§ 100.03 Special Corporations Exceptions, Damage Awards, and Expenses
Chapter 101 Suing Corporations Chartered in or Having
Operations in Foreign Countries
§ 101.01 Service of Process
§ 101.02 Personal Jurisdiction and the Long-Arm Statute
§ 101.03 Venue and Forum Non Conveniens
§ 101.04 Choice of Law
Chapter 102 Suing Governments and Governmental Authorities
of Other Countries
§ 102.01 Service of Process
§ 102.02 Sovereign Immunity
§ 102.03 Personal Jurisdiction and Long-Arm Statutes
§ 102.04 Removal to Federal Court
§ 102.05 Venue
§ 102.06 Choice of Law
Chapter 103 Being Sued by Corporations or Governmental
Authorities of Other Nations
§ 103.01 Extraterritorial Effect of Judgments
§ 103.02 Recognition and Enforcement of Foreign Judgments
PART V Distressed Companies
Chapter 104 Options under State Law for Distressed Companies
and Their Creditors
§ 104.01 Initial Considerations
§ 104.02 Workout
§ 104.03 Assignment for the Benefit of Creditors
§ 104.04 Corporate Receivership
Chapter 105 Bankruptcy Practice
§ 105.01 Introduction and Overview of the Bankruptcy Code
§ 105.02 Commencement of a Bankruptcy Case
§ 105.03 Bankruptcy Court Jurisdiction and Venue
§ 105.04 Chapter 11 - Introduction
§ 105.05 - Automatic Stay
§ 105.06 - Property of the Estate
§ 105.07 - Cash Collateral
§ 105.08 - Debtor-in-Possession Financing
§ 105.09 - United States Trustee
§ 105.10 - First Meeting of Creditors
§ 105.11 - Committees
§ 105.12 - Compensation of Professionals
§ 105.13 - Trustees and Examiners
§ 105.14 - Claims - Characterization of Claims
§ 105.15 Filing a Proof of Claim
§ 105.16 - Sales of Assets in a Bankruptcy Case
§ 105.17 - Executory Contracts
§ 105.18 - Creditor Rights - Reclamation
§ 105.19 - Setoff
§ 105.20 - Plan and Disclosure Statement
§ 105.21 - Confirmation
§ 105.22 - Cramdown and the Absolute Priority Rule
§ 105.23 - Avoidance Powers - Hypothetical Lien Creditor
§ 105.24 - Preference Actions
§ 105.25 - Prepetition Fraudulent Conveyances
§ 105.26 - Postpetition Transfers
§ 105.27 - Dischargeability of Debt
§ 105.28 - Tax Considerations in Chapter 11
§ 105.29 - Conversion and Dismissal
§ 105.30 Chapter 7 - Initial Considerations
§ 105.31 - The Chapter 7 Process and Distribution of Assets
§ 105.32 - Differences from Chapter 11
§ 105.33 - Eligibility of Debtor
§ 105.34 - Cash Collateral and Debtor-in-Possession Financing
§ 105.35 - United States Trustee
§ 105.36 - Committees
§ 105.37 - Trustees
§ 105.38 - Executory Contracts
§ 105.39 - Plan and Disclosure Statement
§ 105.40 - Dischargeability of Debt
§ 105.41 - Compensation of Trustee
§ 105.42 - Conversion or Dismissal
§ 105.43 Chapter 13
Chapter 106 Dissolution of the Corporation
§ 106.01 Introduction
§ 106.02 Voluntary Dissolution
§ 106.03 - Voluntary Dissolution by Shareholders and Notice of
Intent to Dissolve
§ 106.04 - Creditors’ Rights
§ 106.05 - Revocation of Dissolution Proceedings
§ 106.06 - Supervised Voluntary Dissolution
§ 106.07 Judicial Intervention: Involuntary Dissolution and
Equitable Remedies
§ 106.08 - Action of Shareholders for Involuntary Dissolution
and Other Remedies Afforded by Minnesota Statute
§ 302A.751
§ 106.09 - - Background
§ 106.10 - - The Criteria for Invoking § 302A.751 and Use
of Equitable Powers, Including But Not Limited to
Involuntary Dissolution
§ 106.11 - - Some Identifiable Tests for Invoking Equitable Powers
of the Court
§ 106.12 - - The Standard of Fraudulent, Illegal Conduct of the
Directors or Those Who Control the Corporation
towards One or More Shareholders
§ 106.13 - - Standard of Unfairly Prejudicial
§ 106.14 - - Buy-outs and the Standard of Unreasonable Price
and Terms in Corporate Documentation
§ 106.15 - - The Standard of Reasonable Expectations
§ 106.16 - - The Standard of a Closely Held Corporation
§ 106.17 - - Relief Afforded under § 302A.751
§ 106.18 - - Buy-out on Motion
§ 106.19 - - Other Equity Relief
§ 106.20 - - Dissolution
§ 106.21 - - Multiple Damages: Financial Damages or Money
Awards for Other Courses of Action Than § 751
§ 106.22 - - Bad Faith Expenses
§ 106.23 - - Conclusion
§ 106.24 Alternatives to Involuntary Dissolution
§ 106.25 Procedure in Involuntary or Supervised Voluntary Dissolution
§ 106.26 Qualification of Receivers
§ 106.27 Filing Claims in Dissolution Proceedings
§ 106.28 - Dissolution Decree
§ 106.29 Exceptions to Claims Barred
§ 106.30 De Facto Dissolution
Chapter 107 Duties to Creditors
§ 107.01 Uniform Fraudulent Transfer Act
§ 107.02 Equitable Subordination
§ 107.03 Piercing the Corporate Veil (Disregard of Corporate Entity)
§ 107.04 Dividend Statutes
Chapter 108 Criminal Implications Arising from a Failed Company
§ 108.01 Introduction
§ 108.02 The Bankruptcy Code
§ 108.03 Federal White Collar Crime
§ 108.04 Minnesota Corporate Criminal Statutes
Chapter 109 Substance over Form: Emerging Legal Doctrines
That Recognize the Practical Realities of Modern Business
§ 109.01 The Payment Period Partnership: Ignoring Rigid Legal
Formalities in Favor of Acknowledging the Realities of Business
§ 109.02 Berreman v. West Publishing Company: Expanding the
Definition of Close Corporations in Context of Fiduciary Duties
§ 109.03 Triple Five of Minnesota, Inc., v. Simon: The Expansion
of the Fiduciary Duty Regarding Exposure and Available Remedies
§ 109.04 - Factual Background
§ 109.05 - Determining Who Owed a Fiduciary Duty
§ 109.06 - Remedies Ordered for Breaches of Fiduciary Duties
Appendices
Appendix A:
Identifying Myths and Realities for Post 2008 Financial Crisis
Corporation Law Rule Formulation and Planning
Appendix B:
Some Perceptions Bearing on the Public Policy Dynamics of Corporation Law
Index
