Home About us Members &
Partnerships
Conference & Symposium
Visiting Scholar
Program

Cooperative
Research Program

Report &
Thesis

Research
Briefing

What's
New
Contact
CH JP KR EN
 → BACK TO Seminar
 
Seminar on April 26

(Summary Report, By San,Yi Tao)
 

Time:17:30~18:30,April 26, 2011
Place:A506 of the second lecture building
Moderator:Sang Yitao,
Member:Zheng Hainan, Wang Junqi, Liao Zhengyong, Ma Hongjun
Content:Scope of the presentation: Chapter two and three



PartⅠThe discussion
Topics:
1. What theories of corporation does chapter two mainly talk about? Which is more consistent with the nature of the company, and why?
2. How to set up a de jure corporation, and what shall we pay attention to in this process, and why?



Zheng Hainan:
There are four theories about what a corporation really is. The first theory is “the corporation as artificial person”. The second theory views the corporation as a privilege from the state that permits the owners and investors to conduct business in the corporate form. Similar to the second theory, the third view is that the articles of the corporation can be seen as a contract or a compact between the corporation and the state. The last one is “Nexus of contracts”. Comparing these four theories, we can see that the first theory, namely “the corporation as artificial person” is more consistent with the nature of the company. In chapter one, it tells us the characteristics of the corporation. I just list two of them..
The foremost thing we should consider is choosing the state of incorporation, and then we should deliver articles of incorporation to the appropriate state official. There are additional steps for organizing the business, such as obtaining a corporate minute book and blank stock certificates, opening the corporate bank account. The most important thing is calling the organizational meeting. In this process, we should pay more attention to which state we should choose to incorporate.
Wang Junqi:
Some theories to explain what a corporation “really” is, they include some theories, the corporation as artificial person; the corporation as privilege or contract; impact of law and economics scholarship-the nexus of contracts.
I think to set up a de jure corporation is a very simple process. In the beginning, she will need to choose the state in which to incorporate, and then every state requires delivering the document to the appropriate state official for filling and every state imposes a filling fee. The document may be called “articles”, and every state also require the corporation to appoint a registered agent. The articles may be delivered to the appropriate state official. At last, when the secretary of state’s office accepts the articles for filing, a de jure corporation is formed. During this process, we should pay attention to some issues in the following. First, the choice of state, second, it is about the articles of incorporation. Third, when a de jure corporation is formed, it is not yet “up and running”.
Liao Zhengyong:
In this chapter, I mean chapter two, the author mainly talk about three typical theorys of corporation, they are: The corporation as an artificial person The corporation as privilege or contract The "Nexus of contracts". Among these theorys, I think a corporation as an entity is more consistent with the nature of a corporation.
After learning chapter three, I get to know the mechanics of formation of corporations, they at least include five steps: Firstly, choosing the state of incorporation. Secondly, delivering a document to the appropriate state official for filling, and filly fee was imposed in this section. Thirdly, waiting for the notice of acceptance of filling. Step four, incorporators adopt articles of incorporation . Last step, calling the organizational meeting. In my opinion, during this process, two points should be paid enough attention. First one, the name of the corporation should not be deceptively similar to the name of another business form authorized to act in the state. Second one, now that very statute lists "powers" that every corporation automatically has.
Sang Yitao:
There are three kinds theory of the chapter two: the corporation as artificial person; the corporation as privilege or contract; impact of law and economics scholarship-the nexus of contracts. I think the theory the corporation as the nexus of contracts is more consistent with the nature of the company. With the development of modern financial markets, the company especially the listed companies’ sociality growing. The traditional theoretical view that a corporation is an artificial person cannot adapt to these changes. So I think the theory the corporation as the nexus of contracts is more consistent with the nature of the company.
In chapter three we can find it is a very simple process for one to found a corporate in the Unite States. For starter, firstly she will need to choose the state in which to incorporate. Secondly consist of filing a document usually called articles of incorporation and taking various organizational acts. In this process, I think we should pay more attention to how formulate an article of incorporation which meet the requirements of the law.
Ma Hongjun:
The chapter two mainly described the corporation in theory and in history. The corporation could be looked as artificial person, privilege or contract. I think artificial person is the best description of the nature of the corporation. The reason is that he corporation is an entity, independent of the people who form it, owe it, and run it. It does business, acquires assets, incurs debts, enters contracts, do everything it does, in its own name rather than in the name of any individual.
In my opinion, to set up a de jure corporation, we should do the things as follow: The first step is that an incorporator should choose the state in which to incorporate, and every state requires that a document be delivered to the appropriate state official for filling and every state imposes a filing fee. The second step is the corporation need to appoint a registered agent. The third step is the incorporator executes the articles and she may undertake to deliver them to the state and receive notice of acceptance of filing. At last, when the secretary of state’s office accepts the articles for filing, a de jure corporation is formed. For the process, I think we should pay more attention to the second and third step. Because most states permit anyone of legal age to act as an incorporator, regardless of residence and most states permit entities to serve as an incorporator.


PartⅡ Study Notes

 

zheng Hai Nan
1、what theories of corporation does chapter two mainly talk about? which is more consistent with the nature of the company? And why?There are four theories about what a corporation really is. The first theory is “the corporation as artificial person”. It regards a corporation as an entity, independent of its owners or managers. This artificial person has most of the legal rights of a natural person. It can do everything in its own name, from acquiring assets to entering contracts. The second theory views the corporation as a privilege from the state that permits the owners and investors to conduct business in the corporate form. Similar to the second theory, the third view is that the articles of the corporation can be seen as a contract or a compact between the corporation and the state. The last one is “Nexus of contracts”. Law and economics scholars came up with this theory. They see a corporation as a bundle of contracts entered by the managers with persons who provide different things, shareholders provide capital, employees provide labor, and suppliers provide materials, etc. The manager is an important person in this theory, because he holds together all the various contributors in the most efficient way. And I want to emphasize that in this theory, the goal of the corporation is viewed as the maximization of shareholder wealth in the enterprise.
Comparing these four theories, we can see that the first theory, namely “the corporation as artificial person” is more consistent with the nature of the company. In chapter one, it tells us the characteristics of the corporation. I just list two of them. One is the corporation is an entity, separates from the persons who own it and run it. Another one is the corporation itself is liable for its debts, not its shareholders. We can see the characteristics of the corporation are totally compatible with the first theory.

2、How to set up a de jure corporation, and what shall we pay attention to in this process, why?First I will explain how to set up a corporation, it is a very simple process. The foremost thing we should consider is choosing the state of incorporation. When it was done, we should deliver articles of incorporation to the appropriate state official. When the secretary of state’s office accepts the articles for filing, a corporation is formed, but it is not yet complete. There are additional steps for organizing the business, such as obtaining a corporate minute book and blank stock certificates, opening the corporate bank account. But the most important thing is calling the organizational meeting. When the meeting is held, the formation process ends.
In this process, we should pay more attention to which state we should choose to incorporate. On the one hand, the choice of incorporation determines the substantive law that will govern the business’s internal affairs. On the other hand, let’s say, a corporation choose New York to incorporate, it is a foreign corporation in any other states. If it does business in California, its transacting business must comply with California’s requirements. So it is very important to choose which state to incorporate, it determines which laws the corporation should follow when dealing with its internal and external affairs.
Wang Jun Qi
Part one: our discussion
Today we had a discuss about the chapter two and the chapter three, we talked about the first question “what theories of corporation does chapter two mainly talk about? Which is more consistent with the nature of the company? And why.” Though studying the chapter two, I think the answer is in the following
First ,some theories to explain what a corporation “really” is, they include some theories, the corporation as artificial person; the corporation as privilege or contract; impact of law and economics scholarship-the nexus of contracts.
Second, Because the corporation is an entity, independent of the people who form it, owe it, and run it. It does business, acquires assets, incurs debts, enters contracts, do everything it does, in its own name rather than in the name of any individual. This artificial person has most of the legal rights of a natural person. It can sue or be sued, apply for business license, hire employees, invest in securities, buy and sell property and it must also pay taxes and fees. In the most, the corporation is an entity in its own right, it is liable for its own debts.
We talked about the chapter three then, next question is “how to set up a de jure corporation, and what shall we pay attention to in this process, and why. I think to set up a de jure corporation is a very simple process. An incorporator undertakes it, in the beginning, she will need to choose the state in which to incorporate, and then, in the general overview, every state requires delivering the document to the appropriate state official for filling and every state imposes a filling fee. The document may be called “articles”, and every state also require the corporation to appoint a registered agent. An incorporator has an easy job-she executes the articles. The articles may be delivered to the appropriate state official .if the articles are approved, corporate existence relates back to the time the document was received .at last ,when the secretary of state’s office accepts the articles for filing, a de jure corporation is formed. During this process, we should pay attention to some issues in the following.
First, the choice of state of incorporation determines the substantive law that will govern the business’s internal affairs.
Second, it is about the articles of incorporation, it includes mandatory provisions and permissive provisions in the articles of incorporation. We should know every state requires four items in MBCA about mandatory provisions, such as the corporation name, the number of shares the corporation, the street address of the registered office and name of the initial registered agent, the name and address of each incorporator. There are also some permissive provisions such as cumulative voting, per-emptive rights, duty of care and so on.
Third, when a de jure corporation is formed, it is not yet “up and running”. There are additional steps for organizing the business. the bylaws should been seen as the contract between the corporation and its directors, offices and shareholders and among those individuals themselves.
Part two: study notes
I think there are also some important parts in the chapter two; first the debate over social responsibility includes two opinions, the one opinion agrees that the corporation should give back the social. but the other opinion thinks that the corporation’s goal is to make money, but our discussion about the corporation’s social responsibility focus on social ramifications of corporate decisions. Second why would states compete for the incorporation business? Money includes the states charging fees and franchise taxes based an the company’s assets and state income taxes, it analysizes whether is good for he shareholders, and why has Delaware general corporation law been so attractive? The answer seems not to be substantive. Delaware is successful in attracting incorporation business because it has created an entire system-with legislation, the bench and bar-that understands business and business law.
I want to talk about one question about ultra vires in the chapter three. If a corporation engages in activity beyond that stated in its articles. It acts ultra vires. Because corporations today generally may state that they will engage in all lawful business, however, this doctrine is of waning importance.
Liao Zheng Yong
Presentation form Liao Zhengyong
During this meeting,we discussed the content of chapter two and three,we mainly discussed two questions,they are:
  1. what theorys of corporation does chapter two mainly talk about ?Which is more consistent with the nature of corporation?And why?
  2. How to set up a de jure corporation and what shall we pay attention to this process,and why?
Ok,first question
In this chapter,I mean chapter two,the author mainly talk about three typical theorys of corporation,they are:
  1. The corporation as an artificial person
  2. The corporation as privilege or contract
  3. The "Nexus of contracts"
All these theorys are simply attempts to explain what a corporation really is,then I will show you some details of these theorys
Firstly,the corporation as an artificial person,this traditional view says that a corporation is an artificial person ,we know ,artificial person is an contrasted item compared with nature person.This theory thinks the corporation is an entity,it does business ,acquires assets,incurs debts,enters contracts,and conduct some other business in the name of its own name,not in the name of any individual.So,we can see,this artificial person has most of the legal rights of a nature person,such as ,sue or be sued,apply for business license ,hire employee,and so on.
One remarkable consequence of this theory is that now that the corporation is an entity in tis own right ,off course ,it is liable for its debts,that means ,shareholders are free for the corporation obligations
Ok,this is theory one
Then ,theory two,the corporation an privilege or contract
This theory tells us that the corporation is a privilege from the state,this privilege permits the owners and investors to conduct business in the form of corporation.In early times ,when states made it relatively difficult to set up a corporation,this theory plays an important role.And most importantly ,this theory is the fundamental theory on which the states apply franchise taxes to corporations but not to other business forms
Ok ,this is theory two
The last theory mentioned in this chapter is "Nexus of contracts"
One of the supporters,professor Coase says:every firm ,in essence,is a long term relational contracts by which each factor of production is affiliated with other factors contributing to the enterprise,so, corporation is not an entity but a bundle of contracts entered by the mangers with persons who provide different things
One obvious problem of this theory is that:can we say a person enters into a contract when he or she buys some shares of that corporation?
This is really a question worthy to be discussed.
Among these theorys, I think a corporation as an entity is more consistent with the nature of a corporation
Reasons are as flows:
Firstly,a corporation is not something too hard to understand,but a form,a form by which,the person who provide things can do business,this is the nature of a corporation,and we know ,a business form can not do business by it self ,then ,corporation appears,,this entity has its own name,enjoys the same rights as an nature person.
Secondly,we take it for granted that a corporation puts the goal of maximizing the wealth of those who provide the capital,this theory match this goal perfectly.Question two
Chapter two tells us how to set up a de jure corporation in America .After learning this chapter,I get to know the mechanics of formation of corporations,they at least include five steps:
Firstly,choosing the state of incorporation.This is very important step because mechanics of creating a corporation vary form state to state widely.
Secondly,delivering a document to the appropriate state official fro filling,and filly fee was imposed in this section.
Thirdly,waiting for the notice of acceptance of filling.That means the state permits you to create a corporation.
Step four ,incorporators adopt articles of incorporation
Last step,calling the organizational meeting,during this meeting ,initial directors will be elected,and then ,a corporation was born
This in an simple introduction of the process of creating a corporation.
In my opinion,during this process,two point should be paid enough attention
First one,the name of the corporation should not be deceptively similar to the name of another business form authorized to act in the state,because this maybe cause unfair competition.
Second one,now that very statute lists "powers" that every corporation automatically has, so ,there is no need for incorporators to adopt such kind of bylaws in the articles of the corporation,by this form,it can be laborsaving.
Ok ,that is all,thank you !
Shang Yi Tao
Today we had a discuss about the chapter two and the chapter three, we talked about the first question “what three kinds theory of corporation does chapter two mainly talk about? Which is more consistent with the nature of the company? And why.” From this chapter, we can see that at different times and for different purpose, scholars have viewed the corporation in various theoretical. There are three kinds theory of the chapter two: the corporation as artificial person; the corporation as privilege or contract; impact of law and economics scholarship-the nexus of contracts.
I think the theory the corporation as the nexus of contracts is more consistent with the nature of the company. This theory devise from the path breaking economic analysis by professor Coase. One of his insights was that every corporation is a long term relational contract by which each factor of production is affiliated with the other factors contributing to the enterprise. In this view of the corporation, shareholders are not the owner. Instead, they are simply contractual suppliers of capital. I think this theory can explain some special corporations which exist in modern market economy. With the development of modern financial markets, the company especially the listed company social growing. The traditional theoretical view that a corporation is an artificial person cannot adapt to these changes. So I think the theory the corporation as the nexus of contracts is more consistent with the nature of the company.
Then we talked about the chapter three, next question is “how to set up a de jure corporation, and what shall we pay attention to in this process, and why”. In chapter three we can find it is a very simple process for one to found a corporate in the Unite States. For starter, firstly she will need to choose the state in which to incorporate. Secondly consist of filing a document usually called articles of incorporation and taking various organizational acts. Last she must pay attention to the problem of ultra vires.
In this process, I think we should pay more attention to how formulate an article of incorporation which meet the requirement of the law. In my opinion article of incorporation is company’s constitution. Every states distinguishes between information that must be included in the article and that which may be included. Lawyer should discuss with their client whether and how the articles should address their topics, included whether to name the initial directors in the article and cumulative voting. In addition, statutes allow the article to change quorum and voting requirements for directors and shareholders. From the above we can see that the articles of association of the company’s establishment, operation, and the company’s bankrupt a important significance.
Ma Hong Jun
Discussion
1. What theories of corporation does chapter two mainly talk about? Which is more consistent with the nature of the company, and why?
The chapter two mainly described the corporation in theory and in history. The corporation could be looked as artificial person, privilege or contract. I think artificial person is the best description of the nature of the corporation. The reason is that he corporation is an entity, independent of the people who form it, owe it, and run it. It does business, acquires assets, incurs debts, enters contracts, do everything it does, in its own name rather than in the name of any individual. This artificial person has most of the legal rights of a natural person. It can sue or be sued, apply for business license, hire employees, invest in securities, buy and sell property and it must also pay taxes and fees. Especially, the corporation is an entity in its own right and it is liable for its own debts.
2. How to set up a de jure corporation, and what shall we pay attention to in this process, and why?
In my opinion, to set up a de jure corporation, we should do the things as follow: The first step is that an incorporator should choose the state in which to incorporate, and every state requires that a document be delivered to the appropriate state official for filling and every state imposes a filing fee. The second step is the corporation need to appoint a registered agent. The third step is the incorporator executes the articles and she may undertake to deliver them to the state and receive notice of acceptance of filing. The articles may be delivered to the appropriate state official .if the articles are approved, corporate existence relates back to the time the document was received. At last, when the secretary of state’s office accepts the articles for filing, a de jure corporation is formed.
For the process, I think we should pay more attention to the second and third step. Because most states permit anyone of legal age to act as an incorporator, regardless of residence and most states permit entities to serve as an incorporator. Besides we should know some states impose additional requirements, for example some require evidence that the registered agent has agreed to serve as such, and some states require publication in a local newspaper of the intent to form a corporation and so on.
 
 
 
 




  Copyright 2007, http://www.asia-taxlaw.com ,All Rights Reserved  
  94 WeiJinLu,NanKaiQu,TianJin,China(300071) / Tel:86-22-2350-1400 / E-mail: gpyang@nankai.edu.cn