Instructor: Dwight Drake

• Corporations
• Law A 514
• Fall 2007
• Instructor: Dwight Drake

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Contact Info – Office Hours

• Email: djdrake@u.washington.edu
• Phones: 206.616.6385, 425.281.1493,
• 425.222.5988, 480.272.6719
• URL:http://faculty.washington.edu/djdrake/Corporationsindex.shtml
• Office Hours: Room 416
• - Tuesday 3:30 p.m to 5:00 p.m.
• - Whenever else you can catch me!

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Course Objectives

• Substantive knowledge of corporations, including basic business concepts and alternative entity options.
• Enhance development of basic lawyer skills:
• Analytical skills
• Dig Out Skills
• Communication Skills
• Collaborative Skills
• Enhance personal development of professional goals

• The Lawyer’s Role as an Advisor to Business Owners,
• Professionals and Entrepreneurs
• Flash Presentation (20 Min. approx) by
• Dwight Drake
• www.law.washington.edu/Career/Handouts/Flash
• Note: It takes a few minutes to load

What Course Is Not!

• Hide the flags.
• Hunt for the flags.
• Memorize the flags.
• Wave flags on exam – score!

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Some Tips…

• Do All Assigned Readings
• First Analyze All Case Studies Solo
• Then Collaborate with Teammates
• Carefully Review Team’s Final Product
• Think About Class Dialogue
• Consistently Write Personal Summary
• Get ahead – Stay ahead!

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Grade Criteria

• Case Study Team Game – 30%
• Final (With One Exception) – 70%
• No tricks, gimmicks or time pressure
• Focus on case studies and class discussion
• Short essays based on fact patterns
• Can use any non-living thing
• Premium on knowing scope of materials

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Case Study Team Game

• Team Size - 5
• Case Study Memo from each team due on scheduled discussion date (20 total)
• One member of team must be prepared to verbally advise client
• Team selected to present in class based on random drawing
• Team members encouraged to collaborate on every case study
• Author’s name must be on Case Study Memo
• More than one Case Study Memo may be submitted by a team

Final Opt-Out Option

• Author Seven Case Study Memos
• Collaborate on 15 Case Studies with Team Members
• Be Prepared If and When You are Up
• Attend class regularly
• Grade B

Case Study Memo Format

• Summary statement of client challenges and/or key issues
• Additional facts (if any) that would help analysis
• Summary of your conclusions and related rationale
• Analysis, including (where appropriate) rationale for rejected alternatives

Writing Basics

• Four “C”s – Concise, Credible, Confident, Convincing
• Keep it tight, real tight. No needless words.
• Use strong, precise verbs.
• Avoid overstated adjectives.
• 100% Intellectual honesty – no finessing.
• Average sentence length: 20 words.
• Avoid multiple negatives.
• No “shall”, “provisos”, “and/or” and other drafting jargon.
• Write for the normal reader, not the intellectual.
• End sentences emphatically.
• Organize, then draft.
• Edit, edit, edit.

Legal Immortal Beings (“LIBs”)

• Corporations
• Partnerships
• Limited Liability Companies
• Trusts (Many Types)

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

US Businesses Projected Revenues 2007

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Corporations $ 21.58 Trillion (84.2%)
• Sole Proprietorships $ 1.23 Trillion (4.8%)
• Partnerships $ 1.35 Trillion (5.3%)
• Limited Liab. Companies $ 1.45 Trillion (5.7%)
• Total $ 25.61 Trillion

LAWYER ROLES

• Litigator - Gladiator / Mudslinger
• Transactor - Deal Maker/ Paper Pusher
• Planner - Strategist / Trouble Maker

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

Why Incorporation?

• Continuity– No Death
• Capital Formation
• Limited Liability Protection
• Interests Transferability
• Centralized Management
• Tax Planning

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

Key Corporation Players

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Shareholders

• Elect

• Directors

• Officers

• Elect

• Reg. Agents

• Appoint

• Employees

• Hire

Closely Held Businesses in America

• 25 million businesses
• 99% of all employers
• 50% of all private sector employees
• 70% Americans first job
• 60% to 80% net new jobs
• 14 times more patents per employee
• 50% plus of all U.S. sales
• Career answer for planning professionals

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• 1-1

Duncan and Sandy Smith Plan

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• 15-10

• Daughter Trust

• Son Trust

• Daughter Trust

• GC Trust – 1

• GC Trust – 2

• GC Trust – 3

• GC Trust – 4

• GC Trust – 5

• GC Trust – 6

• Duncan and Sandy
• Living Trust

• Personal
• Residence
• Trust

• Family
• L.L.C.
• (Growth)

• Family
• L.L.C.
• (New)

• Dynasty
• Insurance
• Trust

• Charitable
• Remainder
• Trust

• C
• Corporation

• Holding
• S Corp
• (Parent)

• Alma
• Mater

• Qualified
• Retirement
• Plan

• QSSS
• Corp
• (One)

• QSSS
• Corp
• (Two)

• Income
• Charitable
• Deduction

• Assets

• Remainder

• Contributions

• Distributions

• Distributions

• Compensation

• Distributions

• Home

• Term
• Use

• Assets

• Assets

• Cash

• Remainder

• Income

• Units

• Units

• Income,
• support

• Copyright 2005 Dwight Drake. All Rights Reserved.
• Business Planning: Closely Held Enterprises
• www. drake-business-planning.com

• Business
• Entity

• Antitrust

• Competitors

• Consumers

• Creditors

• Investors

• Rev. Authorities

• Foreign Entities

• Creative Sources

• Employees

• ConsumerProtection

• UCC/
• Bank’r

• Securities
• Corp Fin

• Emp. Law/
• Benefits

• Tax

• Int. Law

• IP

• Planet Earth

• Envir. Laws

Economic Globalization

• A process of integrating national economies through trade, investment, and capital, technology and labor flows
• Pre-WWI Globalization: Steam engine, railroad, telegraph
• War periods – complete retrenchment
• Post WWII actions – IMF, World Bank, ITO, GATT, WTO

Globalization Driving Forces

• Technology, innovation
• Evolution of money markets
• Failure of import-substitution countries
• End of Berlin Wall and Soviet Union
• Boom ’90s – Near universal buy-in
• Proliferation of multinationals
• Spread of democracy

Shared Fears

• More risks, anxieties from new unknowns, more and different competitors
• Spreading gaps between Have and Have-nots, Skilled and Unskilled
• Need for different government – referee, trainer, safety net
• Deadly opposing forces
• Environment and oil
• Preservation of free market competition

Major U.S. Globalization Challenges

• Huge competition for skilled and unskilled
• America’s huge oil advantage / dependence
• America’s toughest antitrust laws
• America’s dismal savings capacity
• America’s neglected, brewing mega financial crisis

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