Corporations Introduction Flashcards
MBCA 2016 § 2.02 a Articles of Incorporation
MBCA (2016) §2.02(a).Articles of Incorporation.
The articles of incorporation must set forth:
(1)a corporate name for the corporation that satisfies the requirements of section 4.01;
(2)the number of shares the corporation is authorized to issue;(3)the street and mailing address of the corporation’s initial registered office and the name of its initial registered agent at that office; and
(4)the name and address of each incorporator.
MBCA (2016) §2.04.
It provides: “All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under this Act, are jointly and severally liable for all liabilities created while so acting.
Defacto Corporation
if the proprietors were acting in good faith and came very close to forming a de jure corporation (usually said to have reached “colorable” compliance with the formation requirements), there was a de facto corporation. As a result, the proprietors would not be personally liable. It is also a equitable doctrine because the actor must be acting good faith and be unaware that a de jure corporation was not formed
MBCA (2016) § 6.03(a). Issued and Outstanding Shares
A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, converted or cancelled
MBCA (2016) § 6.03
preferred stock, is a preferred class of stock that has special treatment
(2) common stock, is the stock that does not have special treatment
(3) par value. Par value” is the minimum price for which a corporation can issue its shares.
MBCA (2016) § 6.21.Issuance of Shares.
b)The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation.(c)Before the corporation issues shares, the board of directors shall determine that the consideration received or to be received for the shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable.
Delaware § 152.Issuance of Stock; Lawful Consideration; Fully Paid Stock.* * *
The board of directors may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation, or any combination thereof. * * * The board of directors may determine the amount of consideration for which shares may be issued by setting a minimum amount of consideration or approving a formula by which the amount or minimum amount of consideration is determined. * * * In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration shall be conclusive
Delaware § 153.Consideration for Stock.
(a)Shares of stock with par value may be issued for such consideration, having a value not less than the par value thereof, as determined from time to time by the board of directors, or by the stockholders if the certificate of incorporation so provides.(b)Shares of stock without par value may be issued for such consideration as is determined from time to time by the board of directors, or by the stockholders if the certificate of incorporation so provides.
Colorable Compliance
came very close to forming the corporation
