Ultra Vires Acts

In most states, the duty of obedience is recognized as one of the three fiduciary duties a director owes to the corporation. One component of the duty of obedience is that a director is prohibited from committing an ultra vires act. Ultra vires, translated from the Latin, means "beyond powers." An ultra vires act is beyond the scope of the powers bestowed on the corporation (and the director) by the corporate charter or bylaws. Thus, a director commits an ultra vires act when he acts without or beyond the authority vested in him by the corporation.

Registration of a Public Offering with the Securities and Exchange Commission

A company that decides to sell its stock to the public must file a registration statement with the Securities and Exchange Commission. The registration statement is made public as it is filed. However, the company may not sell its securities described in the registration statement until staff of the Commission has declared that the registration statement is effective.

Duty of Loyalty

RATIFICATION OF SELF-INTERESTED DIRECTOR TRANSACTIONS

Small Business Stock Registration Forms

A company that decides to sell its shares to the public normally must file a registration statement with the Securities and Exchange Commission. Before the company may sell the shares, the staff of the Commission must declare the registration statement effective. The basic registration form (Form S-1) includes two parts, including part one, a prospectus or selling document, and part two, additional information required by the Commission that is publicly available but does not have to be provided to investors.

Tortious Interference with a Contract or with Prospective Contractual Relations

Parties to a contract are entitled to performance of the contract without interference from others. Interference with a contract can lead to claims of tortious interference with performance of the contract or tortious interference with prospective contractual relations.