Corp Flashcards
Formation
-must file CoF with SOS
-each organizer initiates this (and signs CoF)
-Once the CoF is filed, the SoS delivers an acknowledgment of the filing to the corporation
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CoF Must Include
1) the name of the corporation, 2) the nature of its business or the purposes for which the corporation is formed,
3) the number of shares of stock that the corporation is authorized to issue,
4) the duration if the corporation is to be in existence for a specific period of time,
5) the street address of the initial registered office of the filing entity and the name of the initial registered agent of the filing entity,
6) the post office address and the name of the corporate agent at such address,
7) the name and address of each organizer, and
8) the number of initial directors on the corporation’s board, their names, and their addresses
De Facto Corp
(1) a statutory law for formation of the corporation;
(2) a good-faith effort to comply with the law; and
(3) the owners and operators must operate under the corporate name.
De Jure Corp
- is created when all of the statutory requirements for incorporation have been satisfied. CoF accepted by SoS
- failure to comply with a mandatory statutory provision precludes de jure status.
- corp now incurs liab
- say assuming this is not abolished*
Naming Corp
- name must contain the word “corporation,” “incorporated,” or “company,” or an abbreviation of one of these words.
- name may not be the same as or deceptively similar to the name of another registered business entity doing business in TX, unless the other entity consents in writing to the use of the similar name.
- should not be misleading
- may not have a name that contains any word or phrase that indicates or implies that the entity is engaged in a business that the entity is not authorized by law to pursue.
Issuance of Stock
- must be authorized by the board of directors.
- shares may be issued by a corp in exchange for any benefits (tangible or intangible) to the corp, including cash, promissory notes, services already performed, and contracts for services to be performed.
- full consideration agreed upon must be received by the corp before the shares may be issued.
par value stock
-the lease value assigned for that stock
may, but is not required to, issue par-value stock.
-the corp is required to receive par value which need not be, and almost always is not, its market value, and which can even be a nominal amount
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Watered stock
- When a corp does not receive consideration at least equal to par value, the stock is characterized as “watered stock.”
- shareholder of “watered” stock is liable to the corporation’s creditors for the difference between the par value of the stock and the amount paid for the stock.
Naming
- name cant have words “lottery” and “lotto” in it
- names can be reserved for 120 days or until the application is withdrawn
Purpose CANNOT BE
1) raising cattle
2) operating stock yards
3) slaughtering, canning, or packing meat
Authorized Shares
CoF must state:
- # of shares corp is authorized to share
- shares’ par value (if none, say that)
CoF if more than one class of stock
must state:
1) each class and a series designation
2) aggregate number of authorized share for each class
3) the par value for each class or series
4) rights, preferences, and privileges of each class of stock
Initial Meeting
1) adopt bylaws
2) elect officers and
3) transact company business
Ultra Vires Action
- latin for beyond the scope
- if corp engages in activities that aren’t for purpose of why corp created
- generally can’t be invalidated
- can challenge ultra vires tho
Challenging ultra vires
- pending K has not commenced or been executed yet.
- SH can file suit to enjoin the corp from executing the action
- court will grant injunction if all parties are present and granting wold be equitable
- will grant damage $ caused by the injunction, not the loss of anticipated profits
