Question

4. What area of corporate business does the “William Act” address? What are the different rules it provides for the concerned business? 5. Write in detail the procedure of formation and dissolution of LLC.

Answer 1

4. What area of corporate business does the “William Act” address? What are the different rules it provides for the concerned business?

The William act is a federal law, which was enacted to protect the investors from non-statutory takeovers bids by corporate raiders, which allows cash tender offers from already owned stocks. A corporate raider is a financier who initiates a hostile takeover bid to gain control over the companies or sell the companies for a profit. The law was enacted in 1968 to formalize how offers can be acquired or tendered. This law deals with takeover bids, tender offers, and the laws laid down to ensure information of takeover bids are disclosed and filed to the securities and exchange commission (SEC). The disclosure should include every detail of the tender offer.

The William act of 1968 contains provisions that stipulate the period in which a tender offer may open and the time constraints on shareholders decisions.

The key rules are as follows:

1. 14 (d) (1) Prohibits making a tender offer of more than 5% of the class of the target company’s equity securities without filing a disclosure statement.
2. 14 (d( (5) (7) It specifies the minimum time the tender must be left open. The extent of a shareholders right to withdraw the shares after the tender. The effect of oversubscription in a partial offer. The impact of an offer increasing the price during the pendency of a tender offer.
3. 14 (e) prohibits non-disclosure, misrepresentation and fraudulent representation. It also prohibits deceptive or manipulative acts or parties related to the tender offers.
4. 14 (e) (2) target company have to disclose the tender offers.

5. Write in detail the procedure of formation and dissolution of LLC.

The procedure for the formation of LLC are as follows:

1. Find a name for your limited liability corporation: The name of your business should not be the same as the name of any other LLC company in the state. The name should end with LLC designators like “XYZ limited company, LLC or L.L.C”. The name can be reserved for a small fee until the articles of the organization are filed.
2. File the articles of the organization: Prepare and file the articles of the organization with the states LLC filing office. You must provide the name, address and the name of owners of the members of the company. A certificate of formation or A certificate of the organization will be given.
3. Creating an LLC operating agreement: The LLC operating agreement will have to create with the rules of ownership and the operation of the business. It includes members percentage interest in the business, the members' rights and duties, information on voting, management and profit and loss.
4. Publish a notice: This rule doesn’t apply in all states. Arizona and New York you have to publish a notice that you are opening an LLC organization.
5. Obtaining license and permits: The company must obtain licenses and permits before starting a business. A seller’s permit or business license would be required depending on your business.
6. Retain the limited liability: To maintain the business as a separate entity. The LLC must maintain records such as detailed financial records, minutes of major decision making, etc.

The process for dissolution of LLC are as follows:

The first step would be to discuss the decision with a lawyer who would take you through the formalities. Then you need to study your buyer-seller agreement and what are the rules in reference to the dissolving of the LLC. You must also review all employees contract and settle their dues according to the agreement. Any financial obligation has to be resolved. You must check out your real estate holdings. You must decide on the liquidating of the property and in case, you have leased property. The property lease has to be settled. In the case of contracts with customers, you must find out ways to complete the contracts and how you need to financially manage them. Then you must finalize your tax returns and file the IRS. All the details have to be presented to all members before the company can be dissolved.

The second step is to present details to all members. The agreement normally contains the condition of dissolving the LLC. The assets will be divided on a pro-rata basis or as mentioned in the agreement. In case of a loss, there might be some discussion and dispute amongst the members. The discussion should be noted as formal minutes. In case of dissolution, the clause is not clearly mentioned in the agreement it can be discussed with the state secretary who will guide you based on states regulations. The date of dissolution should be clear so that the liability of the creditors can be limited. The decision vote for dissolution should be unanimous. The dissolution will be put as formal minutes and the creditors will be informed. This is a formal communication and ahs to be done in writing to limit the liability.

The final wrap up is that the file of the LLC should be submitted to the secretary of state for dissolving the entity. This is important and will protect the members against potential liability or debt.