Business Associations

Corporate bargain--limited liability I.CHARACTERISTICS OF A CORPORATION A.PRINCIPAL CHARACTERISTICS OF A CORPORATION a)Entity Status--a corporation is a legal entity created under the authority of legislature b)Limited Liability--as a legal entity, a corp is responsible for its own debts; its sh's liability is limited to their investment; c)Free Transferability of Interest--shares, representing ownership interests, are freely transferable; d)Centralized Management and Control--a corp's management is centralized in a board of dirs …

…the merits, he may be indemnified. Most statutes also authorize the corp to advance (not pay) expenses in defending against the claim. Statutes vary where the officer or dir settles or loses; they are most liberal concerning indemnification in a third-party suit as opposed to a derivative suit. I)Liability Insurance--in most states, a corp can obtain liability insurance for its indemnification costs and for any liability incurred by its officers in serving the corporation.