Business Associations/Corporations Outline

Corporations Outline, Fall 2016, Zacks
What is a business?
Exchange
Based on profit
The idea is to make money
How you make profit= NOT the Q we are answering in this course
There are a lot of regulators
Customers
Suppliers
Regulations (gov)
Employees
 
: same function but integrating w/in # of diff areas; competitors; how many firms do we have doing this same function?
Acquitting competitors
Way to grow
E.g. Levi Strauss company
They entered into Walmart K, they put pressure on them w/ regard to price—this put a lot of pressure on Levi to make a jean that was w/in Walmart's price, but still looked good
You have to know what your bargain position is
If representing Levi- They care about the terms but they want to get in the door
If representing Walmart- they know they have the power and can play with the terms
Jeans famous for using sweatshops
From business standpoint this is good
Levi commercial
Should we prevent companies from going to another country to get the product made under a lower wage than in the US?
Who should have the right to decide what a corp does?
The development of big business America
Railroads–cheaper, more reliable
Middle managers: as corps got big= these middle managers were deemed to be success of a corp.
Owners—> managers—> operators
 
^ What is the problem with this structure?
Bad managers:
b/c these managers are diff from the owners, they don’t have the same financial interests as the owners
They are on salary–there may not be an incentive to make the store better
E.g. they don’t care if the store is clean, the owner cares if the store is clean b/c if clean then more customers
How do we work on relationship btwn the owners and managers?–going to talk about
It is impossible to run everything if you are an owner and have 25 stores, you need managers
What form of entity should we choose?
E.g. McDonalds coffee burn lawsuit
MD lost
From a corp standpoint, what should you do going forward?
Change the cup
How hot the coffee was
(1) Increase preventative measures
(2) Weigh against likelihood of future lawsuits
(3) How much to ppl like hot coffee?
 
Limited Liability**
Limited liability for owners of an entity for the debts and obligations of an entity.
Talking about later: How do u get that protection? Exceptions
Entity Form
Perpetual life, independent of owners
The assets and liabilities of what these owners own are separate from the corps assets and liabilities
E.g. Singer sewing machine
Clark convinced Singer to make it a corp, saved the corp, Singer died
When a corp comes to you, you look at: (forming a corp)
Limited liability
Entity form, &
what kind of control the corp has
How long should employment be?
Should you be able to take back stock?
 
Will talk about all these steps later in course
Corp law is very diff from other law
Job of corp lawyer is to ask Qs
When reading story, ask Qs:
What could I have done better (from a corp lawyer standpoint)?
 
 
What is the deal?
Own board; jointly operated
Lawsuits brought against shareholders are diff from lawsuits brought against the board
 
 
What is a corp.?
A business filed under the MI corp act*
Created by statut