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Simple English definitions for legal terms
internal affairs of a foreign corporation
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A quick definition of internal affairs of a foreign corporation:
Internal affairs of a foreign corporation: This refers to matters that involve only the inner workings of a corporation, such as selecting officers and declaring dividends. In the past, courts would not hear cases involving these matters, but now they can if it is appropriate. However, they may choose not to if it would be better for the case to be heard by a court in the state where the corporation is incorporated.
A more thorough explanation:
Definition: Internal affairs of a foreign corporation refer to matters that involve only the inner workings of a corporation, such as dividend declarations and the selection of officers. These matters are usually governed by the laws of the state where the corporation is incorporated.
For example, if a foreign corporation is incorporated in Delaware, the internal affairs of the corporation will be governed by Delaware law. This means that any disputes related to the corporation's internal affairs, such as the election of directors or the issuance of stock, will be resolved according to Delaware law.
While courts used to refuse to hear cases involving the internal affairs of a foreign corporation, modern courts now recognize their jurisdiction to entertain such suits. However, they may still refuse to exercise their jurisdiction if it is more feasible and desirable for the case to be heard by a court in the state of incorporation.