Business Law

Articles of Incorporation and Bylaws

Bylaws are written provisions describing how day-to-day operations of a corporation will be conducted. A corporation’s activities are governed, in order of precedence, by statute, corporate charter, and bylaws.

Investor Suitability Requirements for Broker Dealer Recommendations

Broker dealers may make investment recommendations to investors only if the broker dealer first determines that the recommended investment would be suitable for the investor. Suitability depends upon the investor’s tolerance for risk, other investments, income, net worth, financial requirements, and investment objectives.

Medallion Signature Guarantees

Transfer agents and issuers of securities, pursuant to the Uniform Commercial Code, may require a guarantee of the validity of the signature of the person transferring the securities in order to prevent a fraudulent transfer. The Securities and Exchange Commission has designated institutions that may issue such guarantees, and the Securities Transfer Association has developed the Medallion Signature program for those institutions to follow in guaranteeing signatures.

Mutual Fund Prospectus Comparable Information Requirements

(Mutual Fund Prospectus Comparable Information Requirements)

Remedies for Dissenting Shareholders and the Deadlocked Corporation

Dissenting shareholders in a publicly-traded corporation may sell or otherwise dispose of their shares and seek as damages any lessening of value of the shares prior to the sale resulting from the matter causing the dissension. However, shareholders in a closely held corporation may not have a reasonable way to dispose of their shares and avoid dissension. Deadlocks among shareholders or directors of closely held corporations thus may result more often in litigation than such conflicts within publicly held corporations.