Corporations Flashcards
Formation of Corporations
De Jure
De Facto
Corporation by Estoppel
De Jure
One or more persons, signed Articles of Incorporation
De Facto x 3 = improperly formed
Corporation not properly formed. In this case, a court will act as though if:
(1) Relevant incorporation statute exists
(2) parties made a good faith effort to comply with the statute
(3) there is some exercise of corporate privilege
Corporation by Estoppel
Entity that holds itself out to be a corporation despite not being properly formed
Ultra Vires Act
Act that goes beyond the stated purpose of the corporation
Ultra Vires Act at Common Law
the Act can be voided
Ultra Vires Act at Modern Law
UV K is valid as to 3P BUT SH can seek an injunction to stop the UV act and corp can sue responsible managers for UV losses
Pre-Incorporation Contracts Liability
Promoter: liable unless or until a novation
Corporation: not liable unless corporation adopts
Can adopt by express adoption which occurs when board has accepted or by impress adoption which occurs when corp accepts benefits
Promoter
person who acts on behalf of an unformed corporation
Corporate Management; Election of BOD
Annually, unless terms of BOD are staggerd
Corporate Management; Director Removal
majority SH vote, can be with or without cause UNLESS articles provide otherwise
Corporate Management; Meetings
BOD must hold a meeting + quorom must be present at any vote for an act of the BOD to be valid
