- Was the corporation set up properly? Can you locate the certificate of incorporation?
- Can you locate the governing documents of the corporation – articles of incorporation, bylaws, and the stockholder agreement, if such exists?
- When and how are stockholders and shareholders meetings to be called? To what extent are the directors obligated to adhere to such and are they doing so?
- Does the state under which the corporation was organized have special statutes for closely held corporations? Does the company qualify and, if so, have they officially adopted them?
- Are the directors and officers complying rigidly with the provisions that maintain the liability shield so important to all shareholders?
- When and how are directors appointed?
- How many director seats are there and can the number be changed? If so, when and how?
- What is the term of each board appointment?
- List the shareholders and the percentage ownership of each. Is there a controlling shareholder? Is there a control group? How might you, or others, influence which directors are elected?
- Who may call a special meeting of stockholders? Directors? How can these be called?
- What constitutes a quorum of shareholders? Directors?
- What are the limitations to the directors’ powers? Officers?
- How are motions brought before the board and/or shareholders at meetings? What is the protocol for voting? What constitutes passage and failure of a motion? A vote?
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
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