25: Corporate Expansion, State and Federal Regulation of Foreign Corporations, and Corporate Dissolution
- Page ID
- 11168
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)After reading this chapter, you should understand the following:
- How a corporation can expand by purchasing assets of another company without purchasing stock or otherwise merging with the company whose assets are purchased
- The benefits of expanding through a purchase of assets rather than stock
- Both the benefits and potential detriments of merging with another company
- How a merger differs from a stock purchase or a consolidation
- Takeovers and tender offers
- Appraisal rights
- Foreign corporations and the requirements of the US Constitution
- The taxation of foreign corporations
- Corporate dissolution and its various types
This chapter begins with a discussion of the various ways a corporation can expand. We briefly consider successor liability—whether a successor corporation, such as a corporation that purchases all of the assets of another corporation, is liable for debts, lawsuits, and other liabilities of the purchased corporation. We then turn to appraisal rights, which are a shareholder’s right to dissent from a corporate expansion. Next, we look at several aspects, such as jurisdiction and taxation, of foreign corporations—corporations that are incorporated in a state that is different from the one in which they do business. We conclude the chapter with dissolution of the corporation.
- 25.1: Corporate Expansion
- This page outlines methods of corporate expansion, including asset purchases, mergers, consolidations, and stock purchases, highlighting their legal distinctions. It emphasizes the importance of antitrust laws in these processes. Additionally, it covers the regulatory landscape for tender offers, mergers, and acquisitions as shaped by the Williams Act and state laws, along with key Supreme Court rulings that influence these regulations.
- 25.2: Foreign Corporations
- This page outlines the legal framework for foreign corporations in the U.S., focusing on admission requirements, jurisdiction, and taxation. Foreign corporations need a certificate of authority and a registered agent, facing penalties for noncompliance. Jurisdiction is determined by business activity, with long-arm statutes enabling legal action based on minimal contacts. States can tax these corporations as long as it doesn't unduly affect interstate commerce.
- 25.3: Dissolution
- This page discusses the dissolution and liquidation of corporations, defining dissolution as the cessation of legal existence and liquidation as the process of settling debts and distributing assets. It differentiates between voluntary dissolution (requiring shareholder consent) and involuntary dissolution (initiated by the state), along with judicial dissolution from lawsuits.
- 25.4: Cases
- This page discusses a legal case initiated by the Louisiana Department of Revenue to recover use taxes on catalogs. The court ruled that the catalogs were subject to state tax, affirming the state's right to impose taxes on out-of-state businesses.
- 25.5: Summary and Exercises
- This page explains corporate expansion methods such as asset purchases, mergers, consolidations, and stock acquisitions. Asset purchases typically shield buyers from debts, while mergers transfer those debts. Consolidation forms a new corporation. Shareholders hold appraisal rights in these situations, and corporate actions are regulated by federal and state laws.