Corporations

Question 1

Pre-Incorporation Liability

Answer 1

A corporation is not liable for pre-incorporation transactions entered into by a promoter. The fact that a promoter enters into the transaction to benefit a future corporation is not sufficient to hold the corporation liable.

Question 2

Corporation Accepting Liability for Promoter Activity

Answer 2

The corporation can be liable, however, when the corporation adopts, accepts, or ratifies the contract made by the promoter. If the corporation accepts the benefits of the contract, then it is generally required to perform the obligations of the contract.

Question 3

Adopting Contract from Promoter

Answer 3

Adoption of a contract can be express or implied. Adoption takes place when the corporation accepts the benefits of the transaction or gives an express acceptance of liability for the debt, such as through board resolution after incorporation.

Question 4

LLC Definition

Answer 4

A limited liability company is a legally recognized business entity that enjoys not only the pass-through tax advantage of a partnership, but also the limited liability of a corporation.

Question 5

LLC Managment

Answer 5

An LLC also provides flexibility in managing the entity. Membership is vested in its managers or Members.

Question 6

LLC Creation

Answer 6

It is created by filing AIC in state w
(i) the name and address of each organizer

(ii) the street address of the registered office and agent, and

(iii) the mailing address of the LLC’s principal place of business.

Question 7

LLP

Answer 7

a partnership in which a partner’s personal liability for obligations of the partnership is eliminated.

Question 8

Formation in GA of LLP

Answer 8

Must file with the superior Clerk:

1) name of Partnership
2) What does the partnership do
3) Statement that the partnership elects to be a LLP
4) statement the election has been authorized

Question 9

Art of Incorp Req

Answer 9

(i) in English,
(ii) typewritten or printed,
(iii) signed by the chairperson of the board of directors, an officer, an incorporator, or other fiduciary, and
(iv) filed with the secretary of state along with a filing fee.

Question 10

When Corporation Begins

Answer 10

The legal existence of a corporation begins when the articles of incorporation are filed by the secretary of state (called a de jure corporation).