1. 2007 David K. Linnan BUSINESS CORPORATIONS INTRODUCTION Prof David K. Linnan USC LAW # 600 8/20/07

2. 2007 David K. Linnan ADMINISTRATION Book[s] & lack thereof Course website at: http://www.lfip.org/laws600f07 Syllabus in hand “Midterms” & final Problem method & cases on website w/ streaming, second half Laws600 LISTSERV & e-mail addresses

3. 2007 David K. Linnan CHALLENGES Corporations is probably your first course with a complex statute, while you were trained on cases in your first year Corporations is not litigation oriented, so that you need to rethink assumptions about what lawyers do Corporations requires you to understand behavior also at a business or economics level to make sense of the rules Corporations reaches into different areas of law (state corporations law, federal securities law, etc.), so you have to learn to analyze matters different ways for different purposes

4. 2007 David K. Linnan BUSINESS VS ENTITY I SOLE PROPRIETORSHIP Is the business & entity separate? What are the two legally? Ownership vs management Employees, independent contractors, etc. Nature of “ownership” interest Debt vs equity claims

5. 2007 David K. Linnan BUSINESS VS ENTITY II CONT’D Kinds of creditors & debt General creditors Secured creditors (recourse & non-recourse) Subordinated creditors Personal vs business creditors Limited vs unlimited liability Effects of leverage

6. 2007 David K. Linnan CORPORATIONS DEBT VS EQUITY CHARACTERISTICS (JUMPING AHEAD) Limited liability vehicle Equity: Stock (common & preferred) Residual claim on assets Vote Debt: Stream of payments & promises Governed by what?

7. 2007 David K. Linnan ASSIGNMENTS FOR BALANCE OF WEEK ONE Read Klein & Coffee pages 320-84 (valuation as B-School finance), 242-309 (Lawyers financial instruments)