California Business, Corporate, Securities & Startup Company Lawyer

David P. Horne, Attorney at Law

CONTACT US
  • Home
  • About
  • Practice Areas
  • Articles
  • Reviews

Corporate Formalities and Legal Actions Against Your Business

September 18, 2015 david.horne

In the event of legal action, the court will question whether corporate formalities were observed.

The corporation is required to have a board of directors and the board of directors is responsible for overall management of the corporation. Now, that board of directors might consist of just one founder, or it might consist of several individuals, but major corporate decisions need to be approved by the board of directors, and there needs to be a record of that approval.

If the company is leasing an office, if the company is starting a significant product line, or appointing an officer, or borrowing money, any sort of major transaction should be brought to and approved by the board of directors, and there should be a record of that approval, either in minutes of a meeting or so called action by written consent, which is then by signed by all of the directors. And then you have a record of the corporation acting through the Board of Directors.

If, instead, nothing is ever brought to the Board of Directors, and all business is just conducted directly by the individuals acting in the name of the company, there is vulnerability of the corporate shield to challenge because the corporate chain of command has not been followed.

Filed Under: Uncategorized

“David Horne has been an immense help in the start of my business. He has helped me network with contacts needed to develop the company by providing valuable introductions and has been extremely helpful with legal instructions. I’m very lucky to have found David. If you’re looking for someone to help you with your startup, look no further. David’s the best!”
Startup Founder
San Francisco, CA

Connect With Us

  

Contact Us

We want to hear from you. If your matter is time-sensitive, please email us at info@calcorp.com. Otherwise, you may complete the form below, and we will respond to you in the near future.
  • This field is for validation purposes and should be left unchanged.

San Francisco Bay Area • Lake Tahoe • Northern California • Southern California

(415) 401-7100

info@calcorp.com

 

The content of this site is intended for general informational purposes only and does not constitute specific legal advice. Your access to this site, use of the contact form on this site, transmission of email to an address on this site, and telephone or fax inquiry does not create an attorney-client relationship between us. This site is not intended to be a solicitation but may be deemed a COMMUNICATION or ADVERTISEMENT in certain jurisdictions. The reviews, testimonials and endorsements on this website do not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

Legal Notices Privacy Policy

©2007 - 2023 David P. Horne. All Rights Reserved. All trademarks are property of their respective owners.