Law School

Article One of the United States Constitution establishes the legislative branch of the federal government, the United States Congress. Under Article One, Congress is a bicameral legislature consisting of the House of Representatives and the Senate.  Article One grants Congress various enumerated powers and the ability to pass laws "necessary and proper" to carry out those powers. Article One also establishes the procedures for passing a bill and places various limits on the powers of Congress and the states from abusing their powers. Article One Vesting Clause grants all federal legislative power to Congress and establishes that Congress consists of the House of Representatives and the Senate. In combination with the vesting clauses of Article Two and Article Three, the Vesting Clause of Article One establishes the separation of powers among the three branches of the federal government. Section 2 of Article One addresses the House of Representatives, establishing that members of the House are elected every two years, with congressional seats apportioned to the states on the basis of population. Section 2 includes various rules for the House of Representatives, including a provision stating that individuals qualified to vote in elections for the largest chamber of their state's legislature have the right to vote in elections for the House of Representatives. Section 3 addresses the Senate, establishing that the Senate consists of two senators from each state, with each senator serving a six-year term. Section 3 originally required that the state legislatures elect the members of the Senate, but the Seventeenth Amendment, ratified in 1913, provides for the direct election of senators. Section 3 lays out various other rules for the Senate, including a provision that establishes the vice president of the United States as the president of the Senate. Section 4 of Article One grants the states the power to regulate the congressional election process but establishes that Congress can alter those regulations or make its own regulations. Section 4 also requires Congress to assemble at least once per year. Section 5 lays out various rules for both houses of Congress and grants the House of Representatives and the Senate the power to judge their own elections, determine the qualifications of their own members, and punish or expel their own members. Section 6 establishes the compensation, privileges, and restrictions of those holding congressional office. Section 7 lays out the procedures for passing a bill, requiring both houses of Congress to pass a bill for it to become law, subject to the veto power of the president of the United States. Under Section 7, the president can veto a bill, but Congress can override the president's veto with a two-thirds vote of both chambers. Section 8 lays out the powers of Congress. (Taxes are apportioned by state population) It includes several enumerated powers, including the power to lay and collect "taxes, duties, imposts, and excises" (provided duties, imposts, and excises are uniform throughout the US), "to provide for the common defense and general welfare of the United States," the power to regulate interstate and international commerce, the power to set naturalization laws, the power to coin and regulate money, the power to borrow money on the credit of the United States, the power to establish post offices and post roads, the power to establish federal courts inferior to the Supreme Court, the power to raise and support an army and a navy, the power to call forth the militia "to execute the laws of the Union, suppress insurrections, and repel invasions" and to provide for the militia's "organizing, arming, disciplining...and governing" and granting Congress the power to declare war. Section 8 also provides Congress the power to establish a federal district to serve as the national capital and gives Congress the exclusive power to administer that district.

In law, provocation is when a person is considered to have committed a criminal act partly because of a preceding set of events that might cause a reasonable individual to lose self control. This makes them less morally culpable than if the act was premeditated (pre-planned) and done out of pure malice (malice aforethought). It "affects the quality of the actor's state of mind as an indicator of moral blameworthiness." Provocation is often a mitigating factor in sentencing. It rarely serves as a legal defense, meaning it does not stop the defendant from being guilty of the crime. It may, however, lead to a lesser punishment. In some common law legal systems, provocation is a "partial defense" for murder charges, which can result in the offense being classified as the lesser offense of manslaughter, specifically voluntary manslaughter. Provocation is distinct from self-defense in that self-defense is a legal defense, and refers to a justifiable action to protect oneself from imminent violence. Definition. If a crime is caused by provocation, it is said to be committed in the heat of passion, under an irresistible urge incited by the provoking events, and without being entirely determined by reason. "'Malice aforethought' implies a mind under the sway of reason, whereas 'passion' whilst it does not imply a dethronement of reason, is the furor brevis, which renders a man deaf to the voice of reason so that, although the act was intentional to death, it was not the result of malignity of heart, but imputable to human infirmity. Passion and malice are, therefore, inconsistent motive powers, and hence an act which proceeds from the one, cannot also proceed from the other." (Hannah v Commonwealth, Supreme Court of Virginia 1929) Establishing Provocation can reduce a murder charge to a voluntary manslaughter charge. Provocation may be defined by statutory law, by common law, or some combination. It is a possible defense for the person provoked, or a possible criminal act by the one who caused the provocation. It may be a defense by excuse or exculpation alleging a sudden or temporary loss of control (a permanent loss of control is regarded as insanity) as a response to another's provocative conduct sufficient to justify an acquittal, a mitigated sentence or a conviction for a lesser charge. Provocation can be a relevant factor in a court's assessment of a defendant's mens rea, intention, or state of mind, at the time of an act which the defendant is accused of. In common law, provocation is established by establishing events that would be "adequate" to create a heat of passion in a reasonable person, and by establishing that the heat of passion was created in the accused. The defense of provocation was first developed in English courts in the 16th and 17th centuries. During that period, a conviction of murder carried a mandatory death sentence. This inspired the need for a lesser offense. At that time, not only was it acceptable, but it was socially required that a man respond with controlled violence if his honor or dignity were insulted or threatened. It was therefore considered understandable that sometimes the violence might be excessive and end with a killing. During the 19th century, as social norms began changing, the idea that it was desirable for dignified men to respond with violence when they were insulted or ridiculed began losing traction and was replaced with the view that while those responses may not be ideal, that they were a normal human reaction resulting from a loss of self-control, and, as such, they deserved to be considered as a mitigating circumstance. During the end of the 20th century and the beginning of the 21st century, the defense of provocation, and the situations in which it should apply, have led to significant controversies, with many condemning the concept as an anachronism, arguing that it contradicts contemporary social norms where people are expected to control their behavior, even when angry.

An interest in possession trust is a trust in which at least one beneficiary has the right to receive the income generated by the trust (if trust funds are invested) or the right to enjoy the trust assets for the present time in another way. The beneficiary with the right to enjoy the trust property for the time being is said to have an interest in possession and is colloquially described as an income beneficiary, or the life tenant. Beneficiaries of a trust have an interest in possession if they have the immediate and automatic right to receive the income arising from the trust property as it arises, or have the use and enjoyment of it, such as by living in a property owned by the trustees. Such a beneficiary is also known as an income beneficiary or life tenant. There may be more than one income beneficiary, who may have either a joint tenancy or as tenants in common. The trustee must pass all of the income received, less any trustees' expenses, to the beneficiaries. For income tax purposes, the income so accruing to the income beneficiary is taxable income of the beneficiary, and taxed accordingly, unless otherwise exempted. A beneficiary who is entitled to the income of the trust for life is known as a ‘life tenant’ or as ‘having a life interest’. A beneficiary who is entitled to the trust capital is known as the ‘remainderman’ or the ‘capital beneficiary’. A charitable trust is an irrevocable trust established for charitable purposes and, in some jurisdictions, a more specific term than "charitable organization". A charitable trust enjoys a varying degree of tax benefits in most countries. It also generates goodwill. Some important terminology in charitable trusts is the term "corpus" (Latin for "body"), which refers to the assets with which the trust is funded, and the term "donor", which is the person donating assets to a charity. A testamentary trust (sometimes referred to as a will trust or trust under will) is a trust which arises upon the death of the testator, and which is specified in their will. A will may contain more than one testamentary trust, and may address all or any portion of the estate. Testamentary trusts are distinguished from inter vivos trusts, which are created during the settlor's lifetime.

Polygyny is a significant structural factor governing divorce in countries where this is permitted. Little-to-no analysis has been completed to explicitly explain the link between marital instability and polygyny which leads to divorce. The frequency of divorce rises in polygynous marriages compared to monogamous relationships. Within polygynous unions, differences in conjugal stability are found to occur by wife order. There are 3 main mechanisms through which polygyny affects divorce: economic restraint, sexual satisfaction, and childlessness. Many women escape economic restraint through divorcing their spouses when they are allowed to initiate a divorce. Causes. In the western world as a whole, two thirds of divorces are initiated by women. In the United Sates, 69% of divorces are initiated by women and this may be due to higher sensitivity to relationship difficulties. An annual study in the UK by management consultants Grant Thornton, estimates the main proximal causes of divorce based on surveys of matrimonial lawyers. The main causes in 2004 were: Adultery; Extramarital sex; Infidelity – 27%. Domestic violence – 17%. Midlife crisis – 13%. Addictions, for example alcoholism and gambling – 6%. Workaholism – 6%. Other factors – 31%. According to this survey, husbands engaged in extramarital affairs in 75% of cases, and wives in 25%. In cases of family strain, wives' families were the primary source of strain in 78%, compared to 22% of husbands' families. Emotional and physical abuse were more evenly split, with wives affected in 60% and husbands in 40% of cases. In 70% of workaholism-related divorces it was husbands who were the cause, and in 30%, wives. The 2004 survey found that 93% of divorce cases were petitioned by wives, very few of which were contested. 53% of divorces were marriages that had lasted 10 to 15 years, with 40% ending after 5 to 10 years. The first 5 years are relatively divorce-free, and if a marriage survives more than 20 years it is unlikely to end in divorce. Social scientists study the causes of divorce in terms of underlying factors that may motivate divorce. One of these factors is the age at which a person gets married; delaying marriage may provide more opportunity or experience in choosing a compatible partner. Wage, income, and sex ratios are other such underlying factors that have been included in analyses by sociologists and economists. The elevation of divorce rates among couples who cohabited before marriage is called the "cohabitation effect". Evidence suggests that although this correlation is partly due to two forms of selection (a) that persons whose moral or religious codes permit cohabitation are also more likely to consider divorce permitted by morality or religion and (b) that marriage based on low levels of commitment is more common among couples who cohabit than among couples who do not, such that the mean and median levels of commitment at the start of marriage are lower among cohabiting than among non-cohabiting couples), the cohabitation experience itself exerts at least some independent effect on the subsequent marital union. In 2010, a study by Jay Teachman published in Journal of Marriage and Family found that women who have cohabited or had premarital sex with men other than their husbands have an increased risk of divorce and that this effect is strongest for women who have cohabited with multiple men before marriage. To Teachman, the fact that the elevated risk of divorce is only experienced when the premarital partner(s) is someone other than the husband indicates that premarital sex and cohabitation are now a normal part of the courtship process in the United States. This study only considers data on women in the 1995 National Survey of Family Growth in the United States. Divorce is sometimes caused by one of the partners finding the other unattractive.

Shareholder liability for debts. One of the basic principles of modern corporate law is that people who invest in a corporation have limited liability. For example, as a general rule shareholders can only lose the money they invested in their shares. Practically, limited liability operates only as a default rule for creditors that can adjust their risk. Banks which lend money to corporations frequently contract with a corporation's directors or shareholders to get personal guarantees, or to take security interests in their personal assets, or over a corporation's assets, to ensure their debts are paid in full. This means much of the time, shareholders are in fact liable beyond their initial investments. Similarly trade creditors, such as suppliers of raw materials, can use title retention clauses or other devices with the equivalent effect to security interests, to be paid before other creditors in bankruptcy. However, if creditors are unsecured, or for some reason guarantees and security are not enough, creditors cannot (unless there are exceptions) sue shareholders for outstanding debts. Metaphorically speaking, their liability is limited behind the "corporate veil". The same analysis, however, has been rejected by the US Supreme Court in Davis v Alexander, where a railroad subsidiary company caused injury to cattle that were being transported. As Brandeis J put it, when one "company actually controls another and operates both as a single system, the dominant company will be liable for injuries due to the negligence of the subsidiary company." There are a number of exceptions, which differ according to the law of each state, to the principle of limited liability. First, at the very least, as is recognized in public international law, courts will "pierce the corporate veil" if a corporation is being used to evade obligations in a dishonest manner. Defective organization, such as a failure to duly file the articles of incorporation with a state official, is another universally acknowledged ground. However, there is considerable diversity in state law, and controversy over how much further the law ought to go. In Kinney Shoe Corporation v Polan the Fourth Circuit Federal Court of Appeals held that it would also pierce the veil if (1) the corporation had been inadequately capitalized to meet its future obligations (2) if no corporate formalities (for example meetings and minutes) had been observed, or (3) the corporation was deliberately used to benefit an associated corporation. However, a subsequent opinion of the same court emphasized that piercing could not take place merely to prevent an abstract notion of "unfairness" or "injustice". A further, though technically different, equitable remedy is that according to the US Supreme Court in Taylor v Standard Gas Company corporate insiders (for example directors or major shareholders) who are also creditors of a company are subordinated to other creditors when the company goes bankrupt if the company is inadequately capitalized for the operations it was undertaking. Tort victims differ from commercial creditors because they have no ability to contract around limited liability, and are therefore regarded differently under most state laws. The theory developed in the mid-20th century that beyond the corporation itself, it was more appropriate for the law to recognize the economic "enterprise", which usually comprises groups of corporations, where the parent takes the benefit of a subsidiary's activities and is capable of exercising decisive influence. A concept of "enterprise liability" was developed in fields such as tax law, accounting practices, and antitrust law that were gradually received into the courts' jurisprudence.

Key concepts in bankruptcy include the debtor's discharge and the related "fresh start". Discharge is available in some but not all cases. For example, in a Chapter 7 case only an individual debtor (not a corporation, partnership, etcetera) can receive a discharge. The effect of a bankruptcy discharge is to eliminate only the debtor's personal liability, not the in rem liability for a secured debt to the extent of the value of collateral. The term "in rem" essentially means "with respect to the thing itself" (for example, the collateral). For example, if a debt in the amount of $100,000 is secured by property having a value of only $80,000, the $20,000 deficiency is treated, in bankruptcy, as an unsecured claim (even though it is part of a "secured" debt). The $80,000 portion of the debt is treated as a secured claim. Assuming a discharge is granted and none of the $20,000 deficiency is paid (for example, due to insufficiency of funds), the $20,000 deficiency—the debtor's personal liability—is discharged (assuming the debt is not non-dischargeable under another Bankruptcy Code provision). The $80,000 portion of the debt is the in rem liability, and it is not discharged by the court's discharge order. This liability can presumably be satisfied by the creditor taking the asset itself. An essential concept is that when commentators say that a debt is "dischargeable", they are referring only to the debtor's personal liability on the debt. To the extent that a liability is covered by the value of collateral, the debt is not discharged. This analysis assumes, however, that the collateral does not increase in value after commencement of the case. If the collateral increases in value and the debtor (rather than the estate) keeps the collateral (for example, where the asset is exempt or is abandoned by the trustee back to the debtor), the amount of the creditor's security interest may or may not increase. In situations where the debtor (rather than the creditor) is allowed to benefit from the increase in collateral value, the effect is called "lien stripping" or "paring down". Lien stripping is allowed only in certain cases depending on the kind of collateral and the particular chapter of the Code under which the discharge is granted. The discharge also does not eliminate certain rights of a creditor to setoff (or "offset") certain mutual debts owed by the creditor to the debtor against certain claims of that creditor against the debtor, where both the debt owed by the creditor and the claim against the debtor arose prior to the commencement of the case. Not every debt may be discharged under every chapter of the Code. Certain taxes owed to federal, state or local government, student loans, and child support obligations are not dischargeable. (Guaranteed student loans are potentially dischargeable, however, if the debtor prevails in a difficult-to-win adversary proceeding against the lender commenced by a complaint to determine dischargeability. Also, the debtor can petition the court for a financial hardship discharge, but the grant of such discharges is rare.) The debtor's liability on a secured debt, such as a mortgage or mechanic's lien on a home, may be discharged. The effects of the mortgage or mechanic's lien, however, cannot be discharged in most cases if the lien affixed prior to filing. Therefore, if the debtor wishes to retain the property, the debt must usually be paid as agreed. (See also lien avoidance, reaffirmation agreement) (Note: there may be additional flexibility available in Chapter 13 for debtors dealing with oversecured collateral such as a financed auto, so long as the oversecured property is not the debtor's primary residence.)

Justification is a defense in a criminal case, by which a defendant who committed the acts asserts that because what they did meets certain legal standards, they are not criminally culpable for the acts which would otherwise be criminal. Justification and excuse are related but different defenses (see Justification and excuse). Justification is an exception to the prohibition of committing certain offenses. Justification can be a defense in a prosecution for a criminal offense. When an act is justified, a person is not criminally liable even though their act would otherwise constitute an offense. For example, to intentionally commit a homicide would be considered murder. However, it is not considered a crime if committed in self-defense. In addition to self-defense, the other justification defenses are defense of others, defense of property, and necessity. A justification is not the same as an excuse. In contrast, an excuse is a defense that recognizes a crime was committed, but that for the defendant, although committing a socially undesirable crime, conviction and punishment would be morally inappropriate because of an extenuating personal inadequacy, such as mental defect, lack of mental capacity, sufficient age, intense fear of death, lacking the ability to control their own conduct, etc. … Mistake (criminal law). A mistake of fact may sometimes mean that, while a person has committed the physical element of an offense, because they were laboring under a mistake of fact, they never formed the mental element. This is unlike a mistake of law, which is not usually a defense; law enforcement may or may not take for granted that individuals know what the law is. Discussion. Most criminal law systems in developed states exclude mistake of law as a defense, because allowing defendants to invoke their own ignorance of the law would breach the public policy represented by the Latin maxim: ignorantia legis neminem excusat. But someone operating under a mistake of fact will not generally be liable, because, although the defendant has committed the actus reus of the offense, the defendant may honestly believe in a set of facts that would prevent him or her from forming the requisite mens rea required to constitute the crime. For example: A defendant goes into a supermarket and places eight items in a basket which is presented to the cashier for payment in the usual way. Both honestly believe that all eight items have been scanned, and the defendant pays the sum shown on the bill. A store detective, however, notices that a mistake was made by the cashier so that only seven items were priced. This detective arrests the defendant after leaving the store. Since the defendant honestly believes that he has become the owner of goods in a sale transaction, he cannot form the mens rea for theft (which is usually dishonesty) when he physically removes them from the store. There is a complex question as to whether the defense of 'mistake' applies to crimes that do not specify a mental element – such as strict liability offenses and manslaughter by criminal negligence. In Australia, the High Court's 2005 ruling in R v Lavender prevents the use of any 'reasonable mistake of fact' defense in cases of involuntary manslaughter. However, the defense of mistake is available to offenses of strict liability such as drunk driving: see DPP v Bone (2005). And it is the very availability of the defense of 'mistake' that distinguishes between offenses of strict and absolute liability. Mistake of fact is unavailable in respect to absolute liability offenses.

A purpose trust is a type of trust which has no beneficiaries, but instead exists for advancing some non-charitable purpose of some kind. In most jurisdictions, such trusts are not enforceable outside of certain limited and anomalous exceptions, but some countries have enacted legislation specifically to promote the use of non-charitable purpose trusts. Trusts for charitable purposes are also technically purpose trusts, but they are usually referred to simply as charitable trusts. People referring to purpose trusts are usually taken to be referring to non-charitable purpose trusts. Trusts which fail the test of charitable status usually fail as non-charitable purpose trusts, although there are certain historical exceptions to this, and some countries have modified the law in this regard by statute. The court will not usually validate non-charitable purpose trusts which fail by treating them as a power. In IRC v Broadway Cottages Trust (1955) the English Court of Appeal held: "I am not at liberty to validate this trust by treating it as a power. A valid power is not to be spelled out of an invalid trust." Conceptual objections. The basis for the general prohibition against non-charitable purpose trusts is usually phrased on one or more of several specific grounds. The beneficiary principle. A trust is, at its root, an obligation; accordingly, "every trust must have a definite object. There must be someone in whose favor the court can decree performance." With a charitable trust, this power of enforcement is usually vested in the Attorney General. However, such conceptual objections seem less strong since the decision of the House of Lords in McPhail v Doulton (1971) where Lord Wilberforce rode roughshod over objections to widening the class of valid discretionary trusts on the basis that there would be difficulty ascertaining beneficiaries for the court to enforce the trust in favor of. Where the objects of a trust are a purpose rather than an individual or individuals, there is much greater risk that a trust would not be enforceable due to lack of certainty. Cases such as Morice v Bishop of Durham (1804) and Re Astor (1952) re-affirm the court's disinclination to enforce trusts that are not specific and detailed. It is noteworthy that the common law exceptions to the general prohibition on purposes trusts tend to relate to specific and detailed matters, such as maintenance of a specific tomb, or caring for a particular animal. Excessive delegation of testamentary power. Purpose trusts have been attacked conceptually on the basis that it would amount to the delegation of a testamentary power, although subsequent cases have cast doubt on the correctness of that reasoning. Perpetuity. Charitable purpose trusts are exempt from the rule against perpetuities. Private trusts are not. Accordingly, all non-charitable purposes trusts, to be valid, need to comply with the perpetuity rules in the relevant jurisdiction. Common law exceptions. There are, nonetheless, several well recognised exceptions at common law where non-charitable purposes trusts will be upheld. Tombs and monuments. Provisions for the building or maintenance of tombs or monuments have been upheld as a matter of common law, although solely on the basis of ancient precedent. In Re Hooper (1932) a trust for the maintenance of graves was upheld, but the court indicated that it would not have done so had it not been bound by Pirbright v Salwey (1896). Such trusts still need to comply with the requirement of certainty. Hence a bequest to a Parish council for "the purpose of providing some useful memorial to myself" was struck down. Animals. Trusts for the care of specific animals have been upheld. In Re Dean (1889), North J upheld a trust for maintenance of horses and hounds for 50 years relying upon much older authorities and the monument cases.

Divorce (also known as dissolution of marriage) is the process of terminating a marriage or marital union. Divorce usually entails the canceling or reorganizing of the legal duties and responsibilities of marriage, thus dissolving the bonds of matrimony between a married couple under the rule of law of the particular country or state. It can be said to be a legal dissolution of a marriage by a court or other competent body. It is the legal process of ending a marriage. Divorce laws vary considerably around the world, but in most countries, divorce requires the sanction of a court or other authority in a legal process, which may involve issues of distribution of property, child custody, alimony (spousal support), child visitation or access, parenting time, child support, and division of debt. In most countries, monogamy is required by law, so divorce allows each former partner to marry another person. Divorce is different from annulment, which declares the marriage null and void, with legal separation or de jure separation (a legal process by which a married couple may formalize a de facto separation while remaining legally married) or with de facto separation (a process where the spouses informally stop cohabiting). Reasons for divorce vary, from sexual incompatibility or lack of independence for one or both spouses to a personality clash or infidelity. The only countries that do not allow divorce are the Philippines and the Vatican City. In the Philippines, divorce for non-Muslim Filipinos is not legal unless one spouse is an undocumented immigrant and satisfies certain conditions. The Vatican City is a state ruled by the head of the Catholic Church, a religion that does not allow for divorce. Countries that have relatively recently legalized divorce are Italy (1970), Portugal (1975, although from 1910 to 1940 it was possible both for the civil and religious marriage), Brazil (1977), Spain (1981), Argentina (1987), Paraguay (1991), Colombia (1991; from 1976 was allowed only for non-Catholics), Andorra (1995), Ireland (1996), Chile (2004) and Malta (2011). Overview. Grounds for divorce vary widely from country to country. Marriage may be seen as a contract, a status, or a combination of these. Where it is seen as a contract, the refusal or inability of one spouse to perform the obligations stipulated in the contract may constitute a ground for divorce for the other spouse. In contrast, in some countries (such as Sweden, Finland, Australia, New Zealand), divorce is purely no fault. This means it does not matter what the reasons are that a party or parties want to separate. They can separate of their own free will without having to prove someone is at fault for the divorce. Many jurisdictions offer both the option of a no fault divorce as well as an at fault divorce. This is the case, for example, in many states of the US, France and the Czech Republic. Though divorce laws vary between jurisdictions, there are two basic approaches to divorce: fault based and no-fault based. However, even in some jurisdictions that do not require a party to claim fault of their partner, a court may still take into account the behavior of the parties when dividing property, debts, evaluating custody, shared care arrangements and support. In some jurisdictions, one spouse may be forced to pay the attorney's fees of another spouse. Laws vary as to the waiting period before a divorce is effective. Also, residency requirements vary. However, issues of division of property are typically determined by the law of the jurisdiction in which the property is located.

Incorporation and charter competition. The process of starting up a new corporation is quick, though each state differs. A corporation is not the only kind of business organization that can be chosen. People may wish to register a partnership or a Limited Liability Company, depending on the precise tax status and organizational form that is sought. Most frequently, however, people running major enterprises will choose corporations which have limited liability for those who become the shareholders: if the corporation goes bankrupt the default rule is that shareholders will only lose the money they paid for their shares, even if debts to commercial creditors are still unpaid. A state office, perhaps called the "Division of Corporations" or simply the "Secretary of State", will require the people who wish to incorporate to file "articles of incorporation" (sometimes called a "charter") and pay a fee. The articles of incorporation typically record the corporation's name, if there are any limits to its powers, purposes or duration, and identify whether all shares will have the same rights. With this information filed with the state, a new corporation will come into existence, and be subject to the legal rights and duties that the people involved create on its behalf. The incorporators will also have to adopt "bylaws" which identify many more details such as the number of directors, the arrangement of the board, requirements for corporate meetings, duties of officer holders and so on. The certificate of incorporation will have identified whether the directors or the shareholders, or both have the competence to adopt and change these rules. All of this is typically achieved through the corporation's first meeting. One of the most important things that the articles of incorporation determine is the state of incorporation. Different states can have different levels of corporate tax or franchise tax, different qualities of shareholder and stakeholder rights, more or less stringent directors' duties, and so on. However, it was held by the Supreme Court in Paul v Virginia that in principle states ought to allow corporations incorporated in a different state to do business freely. This appeared to remain true even if another state (for example Delaware) required significantly worse internal protections for shareholders, employees, or creditors than the state in which the corporation operated (for example New York). So far, federal regulation has affected more issues relating to the securities markets than the balance of power and duties among directors, shareholders, employees and other stakeholders. The Supreme Court has also acknowledged that one state's laws will govern the "internal affairs" of a corporation, to prevent conflicts among state laws. So under the present law, regardless of where a corporation operates in the 50 states, the rules of the state of incorporation (subject to federal law) will govern its operation. Early in the 20th century, it was recognized by some states, initially New Jersey, that the state could cut its tax rate in order to attract more incorporations, and thus bolster tax receipts. Quickly, Delaware emerged as a preferred state of incorporation. In the 1933 case of Louis K Liggett Company v Brandeis J Lee, represented the view that the resulting "race was one not of diligence, but of laxity", particularly in terms of corporate tax rates, and rules that might protect less powerful corporate stakeholders. Over the 20th century, the problem of a "race to the bottom" was increasingly thought to justify Federal regulation of corporations.