Also known as: business association · corporations · partnerships
Written by attorneys · grounded in primary & secondary sources — see below
The body of law governing the formation, internal governance, fiduciary obligations, and dissolution of business entities such as corporations, partnerships, and limited liability companies.
Bharat Bhatia formed Boulder Construction in a foreign jurisdiction and shipped specialized equipment into the United States without establishing any office or sales force in the forum state. When a distributor resold one unit to a local buyer who later suffered injury, the buyer sued Boulder in the forum. The court declined jurisdiction because mere awareness that the product might reach the forum did not create minimum contacts sufficient to satisfy due process.
Bristol Steel, a limited partnership, dissolved after its general partner decided to cease operations. The partnership applied its remaining cash and required capital contributions first to pay trade creditors and then to reimburse a limited partner who had extended a loan to the entity. Only after satisfying those obligations did the partnership distribute any surplus to holders of transferable interests.
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Bella Barnes and Bobby Brady formed Benson Motors LLC with members residing in three different states. When a customer sued the LLC in federal court, the complaint alleged citizenship only in the state where the LLC maintained its principal office. The court dismissed for lack of diversity because the LLC took on the citizenship of every member rather than possessing its own state of incorporation or principal place of business.
Brandon Black, a limited partner in Barclay Financial, discovered that the general partner had diverted funds in violation of the partnership agreement. Brandon filed suit directly against the general partner seeking to enforce his rights to information and distributions. The court permitted the action because the claim sought to protect Brandon's individual interests rather than solely those of the partnership.
Brooke Bryant operated a poultry processing business through a corporation that received detailed production codes from a federal agency. When the corporation challenged the codes as an invalid delegation of legislative power, the Court examined whether Congress had supplied an intelligible principle to guide the agency's rulemaking.
Boubacar Bah formed a nonprofit corporation that wished to produce and air advertisements expressly advocating the defeat of a federal candidate. The corporation coordinated neither its message nor its spending with any campaign. The Court held that the First Amendment protects the corporation's right to make such independent expenditures without statutory limits.
An officer must perform corporate functions in good faith, with the care a person in a like position would reasonably exercise, and in a manner reasonably believed to be in the corporation's best interests.
A majority of all qualified directors, but never fewer than two, must form a quorum, and a majority of those voting must approve the transaction after receiving full disclosure.
An officer may take the opportunity after presenting it to the corporation and obtaining a disclaimer from a quorum of qualified directors who have received full disclosure of the material facts.
No. A limited partner remains shielded from personal liability for partnership obligations solely by reason of participating in management or control.
…Jurisdiction Because of Diversity (1913) 76 Cent. L.J. 263, 264, 266; Frankfurter, supra note 6; Ball, supra note 6; Warren, Corporations and Diversity of Citizenship (1933) 19 Va. L. Rev. 661, 686. [^maj-21]: Thus, bills which would abrogate the doctrine of Swift v. Tyson have been introduced. S. 4333, 70th Cong., 1st…