STRUCTURING YOUR COMPANY & BUSINESS LITIGATION

1. How do you wish to structure your company?
2. Do you want to limit liability to shareholders?
3. Size of corporation?
4. Delegating control of the corporation’s day-to- day operations?
5. Fiduciary duties of shareholders?
6. Issues with breaches of contract, corporation’s creditor’s, directors duty to exercise reasonable skill care and diligence
7. Structuring contracts?

How shareholders, directors, and employees interact with one another determines the structuring of a company, its size and separate legal personality. Under corporate law, corporations of all sizes have separate legal personality, with limited liability or unlimited liability for its shareholders. Shareholders control the company through a board of directors that, in turn, typically delegates control of the corporation’s day-to-day operations to a full-time executive. Corporate law deals with firms that are incorporated or registered under the corporate or company law of a state.

Directors owe strict duties of good faith, as well as duties of care and skill, to safeguard the interests of the company and the members. A director should have acquired and maintained sufficient knowledge and understanding of the company’s business to enable one to properly discharge one’s duties.

The defining feature of a corporation is its legal independence from the people who create it. Shareholders generally are not liable for debts that remain owing to the corporation’s creditors. This is based on principles of limited liability.