What is corporate law?

Entity choice, and why it is the first decision

• LLC — limited liability with flexible management and pass-through taxation; the default for small and medium US businesses.
• S corporation — pass-through taxation with limits on the number and type of shareholders.
• C corporation — separate taxation, unlimited shareholders, multiple share classes; the structure venture investors expect.
• Partnerships — simple to form, but general partners carry personal liability.

Fiduciary duties

Directors and officers owe duties of care and loyalty. The business judgment rule protects informed, disinterested decisions even when they turn out badly — the protection falls away for self-dealing, conflicts of interest and bad faith. Most US public companies are incorporated in Delaware, so Delaware case law effectively sets the national standard.

Keeping the liability shield

Limited liability is not automatic in practice. Courts pierce the veil where owners mix personal and company funds, skip required formalities, or leave the company deliberately undercapitalised. Separate accounts, written resolutions, signed contracts in the company name and real capitalisation are what keep the shield intact.

Raising money

Any sale of equity or debt is a securities transaction. It must be registered or fit an exemption — Regulation D is the usual route — with state blue-sky filings on top. Getting this wrong gives investors a rescission right, which means the money can be demanded back later.