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USA company registration

Delaware General Corporation Law 2014-01-08 15:44:08 Release　Author：　Read Flow：6676次

The Delaware General Corporation Law (Title 8, Chapter 1 of the Delaware Code) is the statute governing corporate law in the U.S. state of Delaware. While most small corporations do not have a 2/3 vote requirement, in the exact opposite, most large corporations especially those incorporated in Delaware, do have a 2/3 vote requirement. A company that requires a 2/3 super-majority of shares to vote in favor of a motion can grant, in effect, veto power to a shareholder or block of shareholders that own controlling interest, which is more than 1/3 of the shares. Thus in some cases a single entity can essentially maintain controlling interest with only 33.4% of the outstanding shares. Over 50% of U.S. publicly traded corporations and 60% of the Fortune 500 companies are incorporated in that state.
On June 30, 2013, Delaware Governor Jack Markell signed into law amendments to the Delaware General Corporation Law that affect several provisions in the current law and could substantially impact the process through which public companies are merged. The new legislation took effect August 1, 2013, except for ratification of defective corporate acts amendment which will take effect in 2014.

History
Delaware acquired its status as a corporate haven in the early 20th century. Following the example of New Jersey, which enacted corporate-friendly laws at the end of the 19th century to attract businesses from New York, Delaware played the game of fiscal competition by adopting in 1899 a general incorporation act aimed at attracting more businesses. Before the rise of general incorporation acts, forming a corporation required a special act of the state legislature. General incorporation allowed anyone to form a corporation by simply raising money and filing articles of incorporation with the state government's secretary of state.

General benefits
§102(b)(6) shareholders are not liable for corporate debts.
§109(a) shareholders have the right to change the bylaws.
§141(a) 'The business and affairs of every corporation organized under this chapter shall be managed by or under the direction of a board of directors, except as may be otherwise provided in this chapter or in its certificate of incorporation.' So there is a requirement for a board of directors or a comparable organ.
§141(b) the board's quorum for director meetings cannot be under one third.
§141(c) committees of the board cannot be given authority to amend the certificate of incorporation, merge, or recommend dissolution or sale to shareholders, or amend by laws.
§141(d), a director can serve no longer than three years, and if the board is classified one class must stand for election each year
§141(k) states that directors can be removed without any cause, unless the board is "classified", meaning that directors only come up for re-appointment on different years. If the board is classified, then directors cannot be removed unless there is gross misconduct.
§170, regulation of distributions.
§202(b), restrictions on transferability of stock cannot be imposed on shares previously issued without the shareholder's consent.
§211, there must be an annual meeting of shareholders for election of directors and (d) shareholder meetings can only be called if the constitution allows for it.
§216, the quorum for shareholder meetings cannot be less than one-third of those entitled to vote. Also allows for plurality voting.
§218, a voting trust cannot last longer than ten years.
§219, shareholders have the right to inspect the shareholder register within ten days of a meeting.
§220, right to inspect corporations books and record for a proper purpose at any time.
§242(b)(1) any constitutional amendment requires a resolution by the directors, and then a majority vote of shareholders, and the affected classes.
§271, sale of substantially all the corporation requires majority shareholder approval.
§275, dissolution of the corporation requires majority shareholder approval.
§262, shareholders dissenting from a merger have the right to be bought out at a fair value ("appraisal rights").
§327, shareholders have the right to a derivative claim for a breach of duties of care or loyalty.

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Delaware General Corporation Law