This is the basic course in corporation law. It emphasizes counseling and planning, business background, statutory developments, and social policy considerations. The course briefly considers incorporation of an enterprise, including factors relating to choosing a corporation as against other business forms (notably partnership). We then consider management and control of the corporation, action of directors and officers, and, generally, distribution of powers within the corporate structure. The role of shareholders is examined, with special emphasis on proxy regulation under the Securities Exchange Act of 1934.
The next area involves the special problems of the closed corporation. The fiduciary obligations of directors and controlling shareholders receive major attention. This portion of the course considers regulation of insider trading under Rule 10b-5 and Section 16(b) of the Securities Exchange Act. An examination of transfers of corporate control is followed by treatment of shareholder remedies. The course concludes, as time permits, with a survey of promoters' liability, liability for watered stock, and preemptive rights. Much discussion centers around important state statutes, notably the New York Business Corporation Act, the Delaware General Corporation Law, and the ABA Model Act (the basis for statutes in many states). Problems are used at various points in the course to focus classroom discussion.