Formation

Question 1

How is a corp. created?

Answer 1

A corp. is created by filing the articles of incorporation with the Secretary of Sate

**usually involves paying a fee

Question 2

What must be included in the articles of incorporation to be valid?

Answer 2

(1) name of the corp.
(2) name and address of each incorporator
(3) address of initial registered office and name of initial registered agent
(4) number of shares authorized to issue
(5) signature of incorporator(s)

Question 3

When is the date of incorporation?

Answer 3

The date of incorporation is the date if filing unless the Articles deny the date of effectiveness (up to 90 days from filing)

Question 4

What must happen after incorporation?

Answer 4

Organization- a corp must be properly organized at an organizational meeting called by the the initial directors if name in the Articles of incorporation or the incorporators

Question 5

What does organization require?

Answer 5

(1) naming or electing directors

(2) appointing officers

(3) adopting the bylaws (internal rules governing actions and relations to , directors, officers, and shareholders)

**bylaws can’t be inconsistent with the Articles

Question 6

When does an entity have De Facto Corp status?

Answer 6

When statutory requirements are not met to form a corp. a de facto corp. may be formed if: (1) a good faith colorable attempt was made to comply with the statute and (2) corporate principals acted as if they were a corp

Question 7

What is Corp. by Estoppel?

Answer 7

In a K dispute between a 3rd party and an unformed corp beloved to be properly formed a court may:

(1) estop the 3rd party from alleging defective incorporation if that would unjustly expose the corp.’s principals to liability

(2) estop the corp. from arguing it isn’t liable due to defective incorporation if it would unjustly deprive the 3rd party of relief

** can’t use in defense of tort

Question 8

In the case of a defective corp can a person acting as an agent be liable to 3rd parties?

Answer 8

A creditor of a corporation may seek to enforce a corporate liability against persons who knowingly purported to act as shareholders or as agents of the corporation when the corporation did not, in fact, exist.

In such cases, the shareholders or agents are jointly and severally liable for all liabilities created while so acting.

**key word is knowingly