50-69 Flashcards
De Jure Corporation
A corporation formed in accordance with all applicable laws and recognized as corporation for liability reasons.
De Facto Corporation
At common law, a corporation that is defectively formed but is treated as valid corporation.
Shareholders
Owners of shares of stock in a corporation.
Piercing the Corporate Veil
Ability of creditors to reach the stockholder of a corporation holding them personally liable for debts of the corporation.
Ultra Vires
Common law, acts that go beyond those allowed by the articles of incorporation.
Authority of Directors
Directors have the authority to manage the corporation and appoint officers.
Authority of Officers
Officers have the authority to run the day-to-day business, appointed and removed by the board.
Expressed Authority(Corporation)
Authority expressly made and set forth by agreement.
Implied Corporate Authority
Authority not written or stated but is determined by known facts.
Apparent Authority(Corporation)
Third party reasonable relies on corporations representation that agent has authority.
Ratification/Corporation
Ratification by board of directors turning unauthorized act into legally binded act.
Duty of Care (Corporation)
Board of Directors and officers must 1) Act of good faith 2) Act in best interest of the corporation
Duty of Loyalty
Fiduciaries must put interest of the corporation ahead of their own.
Business Judgment Rule
A director or officer who makes a business decision on behalf of the corporation/ in good faith /fulfills the duty of care/ if there’s no conflict of interest, /and believes business judgment is in best interest of the corporation.
Corporate Opportunity Doctrine
Directors and officers cannot pursue business opportunities that the corporation has an expectancy, interest, and a right in having.
