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Corporate Act: A Comprehensive Guide to Its Legal Definition
Definition & Meaning
A corporate act refers to any decision or action taken by a corporation that is authorized by its articles of incorporation and bylaws. These acts are typically executed by individuals who have been granted the authority to do so, such as board members or corporate officers. For instance, declaring dividends is a corporate act that the board of directors may decide upon, based on the corporation's financial health.
Table of content
Legal Use & context
Corporate acts are fundamental in the realm of corporate law, which governs the formation, operation, and dissolution of corporations. These acts can include a variety of decisions, such as issuing stock, approving mergers, or appointing officers. Understanding corporate acts is essential for anyone involved in corporate governance, as they often require specific procedures and documentation. Users can manage some of these processes themselves using legal templates available through US Legal Forms, which are drafted by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A corporation's board of directors holds a meeting to declare a dividend for shareholders based on the company's profitability for the quarter. This decision is documented in the meeting minutes and communicated to shareholders.
Example 2: A corporate officer is authorized to enter into a contract on behalf of the corporation for a new office lease. This act is executed in accordance with the bylaws that grant such authority to the officer. (hypothetical example)
State-by-state differences
Examples of state differences (not exhaustive):
State
Variation in Corporate Acts
California
Requires specific disclosures for certain corporate acts.
Delaware
Known for flexible corporate laws, allowing more diverse corporate acts.
New York
Has strict regulations regarding the documentation of corporate acts.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Difference
Corporate Resolution
A formal decision made by the board of directors.
A corporate act can encompass many resolutions, but not all resolutions are corporate acts.
Bylaws
Rules governing the internal management of a corporation.
Bylaws provide the framework within which corporate acts are performed.
Common misunderstandings
What to do if this term applies to you
If you are involved in a corporation and need to understand or execute a corporate act, consider the following steps:
Review the corporation's articles of incorporation and bylaws to understand the authority and procedures required.
Consult with other board members or corporate officers to ensure compliance with internal rules.
Utilize legal templates from US Legal Forms to prepare necessary documentation efficiently.
If you are unsure about the legal implications, seek professional legal advice.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.
Non-compliance can lead to legal disputes or penalties.
Key takeaways
Frequently asked questions
A corporate act encompasses a broader range of actions taken by the corporation, while a corporate resolution is a specific decision made by the board.
No, some corporate acts can be executed by authorized officers without board approval, depending on the bylaws.
Review your corporation's governing documents and consult with legal professionals if needed.