Mature companies have formal boards of directors. A board of directors manages “the business of a corporation.” BCL § 701. The board establishes binding resolutions for the corporation and appoints and controls corporate officers. With a formal board of directors there is a built-in discipline and objectivity that provides the foundation to maintain and grow the business. Although every business needs that discipline and objectivity, many smaller, emerging, and family busin
A corporate veil insulates the personal assets of shareholders of a corporation (or members of a limited liability company) from the assets of the corporation, thereby protecting such assets from claims against the corporation. Without this shield, if a corporation has creditors, the creditors can proceed against the individual owners whose assets will be subject to collection. In order to ensure that a company owner’s personal assets are protected, one must be able to show t
As part of the formation of a corporation, it is essential to prepare by-laws which set forth how the corporation will operate. Where there are multiple shareholders, it is also a good idea to state how the shareholders will work together within the corporation, how they may vote their shares and how they may transfer their shares, among many other important provisions. These provisions can be set forth in a shareholders’ agreement which will govern the relationship between a
Thank you to all of our panelists and attendees for making this joint CLE/CPE presentation on valuation a great success. And thank you to the Westchester Women's Bar Association and the New York State Society of CPS's, Westchester Chapter for supporting this event.
Family businesses are often run more like a family affair than like a business. They often don’t have a board of directors, corporate by-laws, shareholder’s or director’s meetings, or corporate resolutions. While this informality is both understandable and common, it also poses a grave hidden danger to the business itself. In the absence of corporate formalities, family businesses could lose the insulation that the corporate veil offers. The corporate veil shields owner’s pe
In representing growing businesses, it is important to help clients understand the structure and role of people in their corporation. With that client understanding, an employment attorney or other professional can be assured that client actions are taken with and by the appropriate stakeholder in the corporation. Shareholder’s Role Shareholders of a corporation have the power to: enact and/or amend the corporation’s by-laws, elect directors, and inspect the corporation’s bo