Corporate Insights
Analysis and practical guides on corporate.
174 articles, checklists, and guides on corporate law, written by the attorneys at MC Law. Every piece is general information, not legal advice—for a specific matter, contact the firm.
Director and Officer Fiduciary Compliance Checklist: A Practical Checklist
Directors are judged on process rather than outcome, and the record of that process is built in ordinary meetings long before anyone is sued. This checklist converts the substantive law of fiduciary duty into the operational practices that actually protect a board: how materials are distributed, how conflicts are surfaced and handled, how oversight of the company's genuinely existential risks is structured and documented, and how the protective stack of exculpation, indemnification, advancement, and insurance is assembled and maintained. Work through it once to establish the baseline, then use the annual section as a recurring calendar item for the general counsel or the corporate secretary. It closes with the indemnification, advancement, and insurance architecture that determines who pays when the process is later challenged anyway.
Business Continuity and Crisis Response Checklist: A Practical Checklist
The difference between a business continuity plan and a business continuity capability is testing, and the difference is discovered at the worst possible moment. Most plans are written to satisfy a customer questionnaire, describe a structure nobody has rehearsed, and live on the network that goes down. This checklist builds the capability instead. It works through the business impact analysis that determines what must be recovered and how fast, the dependency map that surfaces single points of failure, the crisis structure that names who decides and with what authority, the communications that must be prepared in advance including the contractual notice obligations most companies have never extracted, the recovery procedures for technology and facilities and people, the insurance that responds, and the exercise regime that finds the gaps.
SAFEs: An Overview of Simple Agreements for Future Equity
The Simple Agreement for Future Equity (SAFE) is the dominant instrument for raising startup seed capital, but its "simplicity" hides mechanics that routinely surprise founders and investors alike. This guide explains what a SAFE is, how it converts to equity at a priced round, and the crucial 2018 shift from pre-money to post-money SAFEs and why that change reallocated dilution risk from investors to founders. It works through valuation caps, discounts, step-up discounts, and most-favored-nation clauses with concrete math, compares SAFEs to convertible notes, and dissects two failure modes founders rarely see coming: the "SAFE pileup" and the "phantom" liquidation preference. It covers the securities-law reality that a SAFE is a security sold under Section 4(a)(2) and Regulation D, the role of pro-rata side letters, the unsettled tax treatment, and the distinct risks each side carries. The goal is to make a judge, a lawyer, and a first-time founder all comfortable with how these agreements actually behave.
Board Meeting and Minutes Checklist: A Practical Checklist
Minutes are the corporation's only durable record of what the board decided and why, and they are read years later by auditors, lenders, acquirers, regulators, and plaintiffs' counsel. Minutes that recite only motions and outcomes are worthless as evidence of a deliberative process, and minutes that transcribe the discussion create admissions. The useful version sits between those, and producing it consistently is a discipline rather than a talent. This checklist covers the meeting cycle: notice and quorum, the agenda and the advance materials that make the duty of care satisfiable, conflicts and recusal, the conduct of the meeting including executive session, what belongs in the minutes and what does not, the resolutions and consents that formalize decisions, and the retention and access practices that keep the record usable.
Buy-Sell Agreements and Business Valuation: Triggers, Formulas, and Funding
A buy-sell agreement decides what happens to an ownership interest when an owner dies, quits, divorces, becomes disabled, or simply wants out, and it is the single most consequential document most closely held businesses will ever sign. The two questions it must answer are what triggers a purchase and at what price, and the most common failure is an agreement that answers the first carefully and the second with a formula nobody has revisited in a decade. This article covers the structural choice among cross-purchase, redemption, and hybrid designs, the full range of triggering events and which ones should be mandatory rather than optional, the valuation mechanisms and the discount fights they generate, and the funding problem that makes an otherwise perfect agreement unenforceable in practice. It also addresses the tax rules that reshape these deals, including the estate-tax consequences the Supreme Court clarified in Connelly.
Nonprofit Governance, Unrelated Business Income, and Private Inurement
A nonprofit board is asked to do three things at once that pull against each other: raise money aggressively, spend it on mission, and avoid every arrangement in which anyone connected to the organization benefits financially. Most governance failures at exempt organizations come from not seeing the tension until a transaction has already closed. This article covers the fiduciary duties of nonprofit directors and how they differ from the corporate versions, the private inurement and private benefit doctrines that have no analogue in for-profit law, the intermediate sanctions regime and the rebuttable presumption procedure that makes compensation decisions defensible, the unrelated business income tax and the exceptions that swallow much of it, and the reporting, lobbying, and solicitation rules that generate the most avoidable problems. Running throughout is a single practical point: the difference between a defensible transaction and an indefensible one is usually contemporaneous documentation rather than the substance of the deal.
Entity Conversion and Redomestication Checklist: A Practical Checklist
A statutory conversion is one filing and complete legal continuity, which makes it deceptively easy to treat as a clerical task. The analysis that should precede it is not clerical: the tax treatment differs sharply by direction, appraisal rights may attach, the lender's consent is almost certainly required, and secured parties must re-perfect within a short window or lose their liens. This checklist separates the analysis from the filing from the long tail of downstream updates, assigns each item an owner, and identifies the long-lead items—licenses, government contract novations, and lender consents—that determine the schedule. This checklist sequences the analysis, the approvals, the filings, and the post-conversion cleanup that a change of form actually requires.
Shareholder Derivative Litigation: Demand Futility, Special Litigation Committees, and Settlement
A derivative suit is a stockholder borrowing the corporation's claim because the board will not sue itself, and nearly every one of them is decided on a procedural question rather than on whether the underlying conduct was wrong. The plaintiff must own stock at the right times, must characterize the claim correctly as derivative rather than direct, and must either make a demand on the board or plead with particularity why demand would have been futile. This article walks through each of those gates, explains the universal demand-futility test Delaware adopted in Zuckerberg and how it changed the pleading exercise, covers the special litigation committee and the two-step Zapata review that follows, and addresses settlement approval, fee awards, mootness fees, and the preclusion problems created by competing plaintiffs racing to file. It closes with what defense counsel and boards should do in the first ninety days, when most of the outcome is determined.
Corporate Structuring and Running Multiple Businesses: A Deep Dive into Holding, Operating, and Parent Companies
Running several businesses out of a single entity stacks every risk in one place, so that one lawsuit can reach everything an owner has built. This article explains the multi-entity architecture that conglomerates, private-equity firms, and sophisticated family offices use to separate valuable assets from risky operations, written so an entrepreneur, a lawyer, and a judge can all follow it. It walks through the building-block entity types and the federal check-the-box tax rules that govern them, the holding-and-operating split and the intercompany leases, licenses, and loans that make it work, and the veil-piercing doctrine—anchored in Walkovszky v. Carlton and modern alter-ego decisions—that can destroy a carelessly maintained structure. It covers Series LLCs, charging-order protection, consolidated returns, transfer pricing under Section 482, the current state of the Corporate Transparency Act, succession planning, and insurance, all illustrated by a single worked example carried from one exposed LLC to a full multi-entity structure.
Nonprofit Annual Compliance Checklist: A Practical Checklist
Exempt status is not a category an organization occupies; it is a set of recurring obligations, and most of the ones that cause real damage are administrative. Three consecutive missed information returns revoke exemption automatically. An unregistered solicitation in a state where donors live draws an attorney general notice. An executive compensation decision made without comparability data and contemporaneous documentation loses a protection that costs almost nothing to obtain. This checklist organizes the year: the filings and their deadlines, the governance actions that must occur annually, the compensation and conflicts procedures that make transactions defensible, the unrelated business income and lobbying tracking, restricted fund compliance, and the periodic reviews that keep the documents aligned with what the organization actually does.
Forming and Qualifying a Nonprofit Corporation: A Practical Guide
Forming a nonprofit is a sequence of decisions in which the early ones constrain everything that follows, and most of them are made by people filling in a form without knowing what the form is deciding. This guide walks through the sequence in order: whether to form at all or use a fiscal sponsor, which entity form and which state, what the articles of incorporation must say for the IRS to grant exemption, how to write bylaws that will govern rather than sit in a drawer, how to build the initial board, and how to complete the exemption application without triggering the questions that stall it. It then covers what happens after the determination letter—state charitable registration, state tax exemptions, employment setup, insurance, and the annual calendar that keeps the exemption alive. Throughout, the emphasis is on the decisions that are cheap at formation and expensive to fix afterward—the purpose and dissolution language in the articles, the composition of the first board, and the choice between the full exemption application and the streamlined one.
Nonprofit Formation and Governance Toolkit
Forming a nonprofit is a sequence in which the early decisions constrain everything that follows, and most of them are made by someone filling in a state form without knowing what the form decides. The articles that omit a dissolution clause fail the organizational test. The board of founders and their relatives cannot approve a compensation decision defensibly. The streamlined exemption application produces a determination letter based on attestations that provide almost no protection. This toolkit runs the arc from the threshold question of whether to form at all through the annual governance cycle: fiscal sponsorship as an alternative, entity and state selection, the articles and bylaws, the initial board, the exemption application, state registrations, and then the governance, compensation, unrelated business income, and reporting obligations that keep exemption alive.