“At each stage, students have to be creative, inventing new facts related to the business and its corporate affairs that bring the documents, and their importance, to life in their proper context,” said Rob Weber, associate professor of law. “The exercise also helps students hone their public speaking skills.”
Students get a hands-on approach navigating through the corporate life cycle of a hypothetical business in the Corporations class taught by Rob Weber, associate professor of law.
Working in small groups, students draft, edit and finalize various corporate documents throughout the semester. Each team would then present its document to the class in succession.
“Each presentation built upon the last,” said Holly van den Toorn (J.D. ’19). “We each had to explain a certain part of the action being taken, the legal documents and relevant law.”
The presentations cover topics imitating the life cycle of a corporation, starting with the business plan. Entrepreneurially inclined students are often drawn to this task, which determines what the business will sell, why the entrepreneur sees an opportunity, what its markets will look like, what capital and other resources the business will require, and what risks and challenges it will face, Weber said.
“At each stage, students have to be creative, inventing new facts related to the business and its corporate affairs that bring the documents, and their importance, to life in their proper context,” Weber said. “The exercise also helps students hone their public speaking skills.”
In the spring class, students created the hypothetical business Atlanta Virtual Reality Conference Center Inc. (AVRCC) for the project. They shepherded AVRCC through its initial stages by drafting relevant documents for (and presenting on) AVRCC’s initial formation as a limited partnership, its conversion into a Delaware corporation and its preparation of a certificate of incorporation and corporate bylaws, Weber said.
“It was impressive how each group of our classmates presented thorough and professional presentations on difficult topics,” van den Toorn said. “Being able to digest the topic and boil it down into a short but on point presentation, and execute in a relatively short time period — that simulated short time frames you usually have in the real world, so it was a good exercise.”
Along the way, Weber would throw in curve balls such as corporate governance disputes, fraud and a derivative suit.
“There was always some plot twist to what was happening to our fictitious company and it was fun to see the class's creativity in dealing with those,” van den Toorn said.
One student group represented an insurgent stockholder desiring to amend the bylaws. AVRCC expanded by forming limited liability company subsidiaries, raised further capital through an exempt “Regulation D” offering of stock and eventually attracted the interest of other companies willing to acquire the company (via merger) at a hefty premium to our initial investment, Weber said.
“After our merger deal nearly fell apart due to valuation issues, my group saved the day with a lock-up voting agreement which committed a number of stockholders to vote in favor of the merger as well as grant the acquiring company irrevocable proxy,” said Mahmoud “Mach” Khatib (J.D. ’18).
Khatib said the project helped him to gain an understanding of corporate law, and kept his interest throughout the class.
“Corporate law can seem very abstract and labyrinthine, but actually seeing and working with fictional corporate documents such as certificates of incorporation, corporate charters and bylaws, demand letters for derivate suits, etc., helped us relate to the legal principles from our readings. Professor Weber provided us with perspective on the economic theories underpinning corporations,” said Khatib, who plans to pursue a legal career in corporate and business transactions, ideally as in-house counsel for a corporation.
Learning about fiduciary duties and what pitfalls to watch out for, were some of the key takeaways from the class, he said. “I also found agency law, enterprise liability, piercing the corporate veil, and the overview of unincorporated business entities important and useful.”
The class put real life context to the concepts said van den Toorn, who plans to practice in Investment Management and Securities.
“We discussed cases, but not in the vacuum of purely academic or theoretical ideas,” she said. “Professor Weber often introduced the background to certain cases and what was going on socially in the country at the time of the case, or personally for individuals involved in the cases, which was not only really interesting, but showed how and why corporate law developed over time as a result of these key cases.”
Khatib said Corporations is a “must-take” class, even for students who want to go into other practice areas.
“Corporations dominate the economy and employment, and have tremendous influence on U.S. politics and lawmakers. It is therefore critical for every lawyer to have basic literacy on corporate law,” he said.