Formation of the corporation

Question 1

What are the 3 elements needed to form a corporation?

Answer 1

1. People - Incorporators. Must have one or more.
2. Paper - Articles of Incorporation
3. Incorporators have notarized articles delivered to the Secretary of State and pay required fees

Question 2

What must the incorporators (people) do to form the corporation?

Answer 2

Execute the articles and deliver them to the Sec. of State, the person executing the articles of incorporation may be an individual or an entity

Question 3

What are the articles of incorporation?

Answer 3

1. The articles are a contract between corporation and shareholders.
2. And also a contract between corporation and state.
3. Information in the articles includes:
   i. Names and addresses of the corporation
   ii. Name and address of each incorporator.
   iii. Name and address of each initial director.
   iv. Name of registered agent and address of the registered office. (Registered agent is the company’s legal representative, so can receive service of process for the corporation.)
4. Generally must contain a statement of purpose
   i. =Generally indicates that the corporation’s purpose is to “engage in all lawful activity, after first obtaining necessary state agency approval” (real world)
   ii. In some states, general purpose is presumed and the articles need not say anything about the corporation’s purpose - Cannot go beyond the scope of the statement of purpose if it is specific (ultra vires)
5. Capital structure - Type of stock, etc. Articles must include: (a) authorized stock, (b) number of shares per class, and (c) information on voting rights and preferences of each class

Question 4

What does it mean to act to form the corporation?

Answer 4

Incorporators have notarized articles delivered to the Secretary of State and pay required fees

Question 5

What is called when the corporation has been legally formed?

Answer 5

De Jure Corporation