Formation

Question 1

Diff types of corp formation

Answer 1

• de jure corporation
• de facto corporation
• corporation by estoppel
• foreign corporation
• limited liability for shareholders
• K formation
• alternative corporate forms

Question 2

De jure corporation & articles of incorporation

Answer 2

definition = corp validly formed according to law

articles of corporation

(1) # of authorized shares
(2) purpose —- ultra vires doctrine
(3) identify registered agent(s)
(4) identify incorporators
(5) name = must indic corp status

Question 3

De facto corp

Answer 3

(1) valid corp law
(2) colorable good faith attempt to comply
(3) unaware that attempt invalid
AND
(4) corp action

Question 4

Foreign corp

Answer 4

def = corp formed outside of CA

must file certificate of authority

(1) # of authorized shares
(2) purpose
(3) identify registered agent(s)
(4) identify incorporators
(5) name

Question 5

Piercing the corporate veil

Answer 5

(1) only controlling shareholders liable
(2) only if justice requires
(3) theories for piercing the corp veil = fraud, undercapitalization, alter ego, enterprise liability, “deep rock” doctrine

Question 6

Theories for piercing corp veil

Answer 6

fraud
undercapitalization
alter ego
enterprise liability
"deep rock" doctrine

Question 7

Corp K formation

Answer 7

in order to be bound
(1) validly incorporated at time of K
AND
(2) action taken must validly bind the corporation

exception: corporation by estoppel

Question 8

Closely-held corporation

Answer 8

(1) unanimous shareholder election - in the articles, bylaws, or other written agreement that is filed w/ the corp

AND

(2) reasonable share transfer restriction - i.e. no public trading of shares

Question 9

Sub-chapter S corporation

Answer 9

avoid corporate taxation

formal reqs:

(1) max 100 shareholders
(2) American residents
(3) one class of stock

Question 10

Professional corporation

Answer 10

def = corporation of licensed professionals

filing reqs:

(1) articles of inc.
(2) must label as professional corporation in articles; AND
(3) purpose to render professional servs. = only one profession; applicable professions (architects, attys, CPAs, engineers, medical professionals)

Limited Liability

• liable for own malpractice/misconduct
• not liable for others’ malpractice/misconduct