An option pool is a number of shares of stock reserved for issuance to service providers of a company pursuant to options and other equity incentives.
The organizational meeting is an initial meeting in which the basic organizational formalities of the corporation are determined.
A person owes another fiduciary duties when that person has control over a financial interest of the other. For example, corporate directors owe fiduciary duties to that corporation’s stockholders.
The duty of care is one of the fiduciary duties and it is violated when an action is taken or not taken on the basis of inadequate information or without following a reasonable process.
In a term sheet, there is commonly a requirement for temporary exclusivity that requires one or both parties to negotiate exclusively with the other for a limited time or under certain conditions so that the investment of resources and time into due diligence and negotiations intended to finalize the agreement does not get interrupted or wasted because of an interloping offer.
A Board of Directors can hold a meeting or a portion of the meeting with only non-employee directors, called an executive session.
The Certificate of Incorporation is a legal document that establishes a corporation as a legal entity and contains basic rules for governance of the corporation.
Units of equity ownership in a corporation entitling their holder to a share of the corporation’s success through dividends and/or capital appreciation.
Board minutes are a summary of what occurred at a meeting of the Board of Directors.
The Board of Directors of a company are the people elected by the stockholders to be responsible for the management of the company.
To “pierce the corporate veil” is to establish that there’s no legal separation between a company and the individuals involved. If a court “pierces the corporate veil”, stockholders may be held personally liable for the corporation’s obligations.
An audit committee is a committee of a company’s board of directors that is delegated the responsibility to oversee financial reporting and disclosure.