Formation

Question 1

Reqs for de jure corp: Person, Paper, Act

Answer 1

Person: Incorporator (person or entity) who executes the Articles and delivers them to the Secretary of State
Paper: Articles w/name of corp, name/address of incorporator, legal rep and street address of registered office, info re stock (authorized stock)
Act: Secretary of State accepts the Articles for filing

Question 2

Organizational Meeting

Answer 2

Meeting required to complete the organization of the corporation by appointing officers and adopting the initial bylaws (held by incorporators or initial directors if named in Articles)

Question 3

Bylaws

Answer 3

Internal document that has operating manual, methods of giving notice, etc; can be amended, repealed, or adopted by SHs or BOD

Question 4

Consequences of Forming a Corp (3)

Answer 4

(1) Internal affairs are governed by laws of the state of incorporation; (2) Entity status; (3) Limited liability of SHs (corp responsible for corp debt)

Question 5

Defective Incorporation

Answer 5

When proprietors thought they formed a corp, but didn’t, they are personally liable for business debts unless there is (1) a De Facto Corp or (2) a Corp by Estoppel [abolished in most states]

Question 6

De Facto Corporation

Answer 6

(1) Relevant incorporation statute; (2) Parties made a GF, colorable attempt to comply with it; (3) There has been an exercise of corp privileges (acting like it’s a corp). If these are met, the business is treated like a corp unless state is suing it. [abolished in most states]

Question 7

Corporation by Estoppel

Answer 7

Someone who treats a business as a corporation may be estopped from denying that it is a corporation; only applies to contract cases (not torts) [abolished in most states]

Question 8

Pre-incorporation Contract

Answer 8

Promotor acts on behalf of corp not yet formed and enters into a contract on prospective corp’s behalf

Question 9

Liability on Pre-incorporation Contracts

Answer 9

Corp: liable only if it adopts contract (express or implied by taking a benefit)
Promotor: liable unless there is a novation, even if corp adopts

Question 10

Foreign Corporaton

Answer 10

Corp that is outside the state it’s transacting in; must qualify before it transacts business or pay civil fine and forfeit right to sue in state (can still be sued)