Corporate Regulations and Change Class

1. S Corps are limited to 100 shareholders. Any more shareholders and a company must form a C Corporation. In order to become an S Corp, the corporation must file for it. Should all corporations be able to become S Corp's regardless of size? Who or why not?

2. A client comes to your employer's office to start a corporation. He wants to start a restaurant. He has concerns about personal liability. He does not want any of his personal assets to be able to be attached to the restaurant's creditors. Also, because it is a restaurant, he is concerned about being sued. He plans on making this a chain of restaurants like "Chili's". He will eventually want to make it worldwide and have lots of investors. He knows nothing about business entities. Nether does your employer. Your employer asks you to let him know what types of entities are available for his/her client and what you suggest and why. Please respond to this discussion question to your instructor via Course Message.

3. Major credit card companies incorporate in the state of Delaware to be able to charge higher interest rates. For example, in most instances, Florida's interest rate is capped at 18%. However, Visa and MasterCard, if incorporated in Delaware, can charge much higher rates. If the company was incorporated in Florida it would be limited to 18%. Any interest higher than that would not be enforceable. As all foreign corporations (corporations formed in another state) must register to do business in Florida, should credit card companies have to agree to charge Florida interest rates? Why or why not?

Discussion Questions - Wills, Trusts & Estate

1. A spendthrift provision is designed to protect a beneficiary while his interest is held in the trust. Once the asset is transferred to the beneficiary, should the spendthrift provision still provide the same protection? Why or why not? Does it matter if the asset is real property or an intangible asset such as money?

2. An attorney accidentally forgets to place in the trust instrument that the trust is revocable. The client fails to notice this when he reads it. Is there any way this could be corrected? If so, how?

3. A woman dies in Miami Beach. At the time of her death, she had assets in the amount of $500,000.00. She had a living trust but only put one small bank account worth $1,000.00, in it. She had a pour over will which provides for all assets to be transferred to the trust. What probate procedure should be done to have this transfer completed and why?