delaware incorporation

All About It: Delaware Incorporation

Delaware is much more than just the “Diamond State”. When it comes to incorporating your business, it may just be a diamond in the rough. Let’s take a closer look at why Delaware incorporation is increasingly becoming a no-brainer for organizations across the country in a new series we’re calling All About It—where we dive deep into the topics that fascinate us the most!
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Fast Facts on Delaware Incorporation

Spend an hour researching the process of incorporating a business, the state of Delaware is bound pop up once or twice. Delaware is considered something of a haven for businesses in the United States, giving companies flexibility in formation, low tax rates, and a streamlined court system with which to resolve disputes. If you’re interested in learning more about how Delaware’s General Corporation law came to be, check out the latest article in our series, All About It, where we dive deep into the topics that fascinate us the most.

If you’ve only got time for the brass tacks, we’ve still got you covered. Check out the fast facts on Delaware Incorporation below!

A board member uses the 5 Whys technique to prioritize her problem-solving.

California Quota Law: Empowerment or Impediment?

A new California law aimed at breaking the glass ceiling has become the buzz of boardrooms across the country. On Sunday, Governor Jerry Brown signed a bill, passed by state legislators in August, requiring all publicly-traded companies headquartered in California to include at least one female board member by the end of the year.

By the end of 2021, boards with five members must include two women and boards with six members must include three or more—and “inclusion” is the operative word, here.

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Understanding the Types of Shareholder Lawsuits

Boards exist to protect shareholders based on the fiduciary duties of care, loyalty, and good faith. If shareholders feel that those duties have not been met by a board or board member, they can take legal action against them.

shareholder lawsuits

The “business judgment rule” protects boards and board members from lawsuits for simply making bad choices. As LegalMatch shares, “The business judgment rule requires that courts defer to the board of directors in business matters.

The only exception to the business judgment rule is if shareholders can show that the board of directors engaged in fraud, illegal activities, or were grossly negligent while managing the corporation.”

In other words, boards are afforded the right to make bad business choices as long as there is evidence they were acting in good faith. If there is a belief that the board or a board member has engaged in one of those wrongful practices, there are two options for types of shareholder lawsuits: a direct lawsuit (also called shareholder class action lawsuit) or a derivative lawsuit.
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