Corporate Law Cheat Sheet

The core ideas of Corporate Law distilled into a single, scannable reference — perfect for review or quick lookup.

PiqCue — piqcue.com/corporate-law/cheatsheet

Quick Reference

Separate Legal Personality

The legal doctrine that a corporation is a distinct legal entity, separate from its shareholders, directors, and officers. This means the corporation can own property, enter contracts, sue and be sued, and incur liabilities in its own name.

Limited Liability

The principle that shareholders of a corporation are only liable for the company's debts up to the amount of their investment. Their personal assets are generally protected from the corporation's creditors.

Fiduciary Duty

The legal obligation of directors and officers to act in the best interests of the corporation and its shareholders. This encompasses the duty of care (making informed decisions) and the duty of loyalty (avoiding conflicts of interest).

Corporate Governance

The system of rules, practices, and processes by which a corporation is directed and controlled. It defines the distribution of rights and responsibilities among the board of directors, management, shareholders, and other stakeholders.

Piercing the Corporate Veil

A legal doctrine that allows courts to disregard the separate legal personality of a corporation and hold its shareholders personally liable for corporate debts, typically when the corporate form has been abused or used to perpetrate fraud.

Business Judgment Rule

A legal presumption that protects corporate directors from personal liability for business decisions made in good faith, with due care, and in the honest belief that the decision serves the corporation's best interests.

Mergers and Acquisitions (M&A)

Corporate transactions in which two or more companies combine (merger) or one company purchases another (acquisition). M&A law governs the negotiation, structuring, regulatory approval, and execution of these transactions.

Securities Regulation

The body of law governing the issuance, trading, and disclosure requirements for corporate securities such as stocks and bonds. In the United States, the Securities and Exchange Commission (SEC) enforces these regulations.

Articles of Incorporation

The foundational legal document filed with a state government to formally create a corporation. The articles typically specify the corporation's name, purpose, registered agent, authorized share structure, and the names of initial directors.

Shareholder Rights

The legal entitlements of shareholders in a corporation, including the right to vote on major corporate decisions, elect directors, receive dividends when declared, inspect corporate books, and bring derivative lawsuits on behalf of the corporation.

Key Terms at a Glance

Articles of Incorporation:The foundational legal document filed with a state government to create a corporation, specifying its name, purpose, share structure, and registered agent.

Board of Directors:The governing body of a corporation elected by shareholders, responsible for overseeing management, setting corporate policy, and making major business decisions.

Business Judgment Rule:A presumption that directors acting in good faith, with due care and on an informed basis, will not be held liable for honest business decisions.

Bylaws:Internal rules adopted by a corporation that govern its operations, meetings, voting procedures, and officer responsibilities.

C Corporation:The default corporate tax classification under the Internal Revenue Code, subject to corporate income tax on profits and double taxation when dividends are distributed.

Corporate Governance:The framework of rules, relationships, systems, and processes within which authority is exercised and controlled in a corporation.

Derivative Suit:A lawsuit filed by a shareholder on behalf of the corporation to enforce a right that the corporation has failed to assert on its own.

Dissolution:The formal legal process of winding up a corporation's affairs, settling debts, distributing remaining assets, and terminating its legal existence.

Double Taxation:The taxation of corporate income at both the corporate level and again at the shareholder level when distributed as dividends.

Due Diligence:A comprehensive investigation of a company's financial, legal, and operational status, typically conducted prior to a merger, acquisition, or major investment.

Duty of Care:A fiduciary obligation requiring corporate directors to act with the care that a reasonably prudent person would exercise in similar circumstances.

Duty of Loyalty:A fiduciary obligation requiring directors and officers to act in the best interest of the corporation, avoid conflicts of interest, and refrain from self-dealing.

Fiduciary Duty:The highest standard of care in law, requiring directors and officers to act with loyalty, good faith, and care toward the corporation and its shareholders.

Hostile Takeover:An acquisition of a target corporation without the consent or cooperation of the target's board of directors.

Insider Trading:The illegal buying or selling of securities based on material, non-public information, in violation of a duty of trust or confidence.

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