business organizations

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Overview

The business judgment rule is invoked in lawsuits when a director of a corporation takes an action that affects the corporation, and a plaintiff sues, alleging that the director violated the duty of care to the corporation.

In suits...

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Overview

A close corporation is a corporation which does not exceed a statutorily defined number of shareholders and is not a public corporation. This number depends on the state's business laws, but the number is usually 35 shareholders.

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In the law of corporations, describes decision by a court to subordinate a controlling shareholder’s claims upon debt owed her by her own firm, to those of other “outside” (i.e., bona fide third party) creditors in bankruptcy. Equitable subordination...

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Overview

When someone has a fiduciary duty to someone else, the person with the duty must act in a way that will benefit someone else, usually financially.

The person who has a fiduciary duty is called the fiduciary, and the person to whom...

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Under common law, in determining the extent to which partnership creditors whose debts are not fully satisfied by partnership property can assert claims to the assets of individual partners, the Jingle Rule gave partnership creditors priority in all...

(Wex page)
Overview

"Piercing the corporate veil" refers to a situation in which courts put aside limited liability and hold a corporation's shareholders or directors personally liable for the corporation’s actions or debts. Veil piercing is most common in...

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The Securities Act was Congress's opening shot in the war on securities fraud. Congress primarily targeted the issuers of securities. Companies which issue securities (called issuers) seek to raise money to fund new projects or investments or to expand...