Corporations Flashcards
Proper Notice
Directors are entitled to notice of a special meeting, unless the articles of incorporation or bylaws provide. Otherwise notice must be provided at least two days prior to the meeting and save the date time and place of the meeting. The purpose doesn’t matter.
When is the waiver of notice?
If directors don’t get notice their attendance, Waze notices that meeting unless the Director promptly Jax to lack of notice
What is a quorum?
For a board of directors act, add a meeting to be valid a quorum of directors must be present at the meeting majority of all directors an office constitutes a quorum, unless the articles of incorporation or bylaws regarding require a higher or lower number
If a member is not present or is present virtually, but can’t hear everyone then they are legally not present
How do you form a corporation?
In order to form a corporation, articles of incorporation must be filed with the state. The articles must include certain basic information, including the number of shares the corporation is authorized to issue. Unless a delayed date is specified in the articles, the corporate existence begins when the articles are filed.
What if you file a corporation improperly?
When it is sent back, you can fix it and send it back. When it is received and filed by the Secretary of State, that is the date of existence
Is someone personally liable in a contract made before incorporation if they meant to file it but did it wrong?
When a person conducts business as a corporation without attempting to comply with the statutory incorporation requirements, that person is liable for any obligations incurred in the name of the nonexistent corporation.
A person is not likely to be liable under this provision if she made a good-faith attempt to comply with the statutory requirements for incorporation and just filed something incorrectly
When will the corporation be liable?
When all of the statutory requirements for incorporation have been satisfied, a de jure corporation is created. Consequently, the corporation, rather than persons associated with the corporation, is liable for activities undertaken by the corporation. However, when a corporation has not been created, the entity may be treated as a general partnership. A partnership is an association of two or more persons to carry on a for-profit business as co-owners. In a general partnership, each partner is jointly and severally liable for all partnership obligations.
Even if it isn’t formed by mistake, as a general partner, and individual could be liable for a contract entered before the corp was formed
What are defenses to personal liability in a partnership?
When a person makes an unsuccessful effort to comply with the incorporation requirements, that person may be able to escape personal liability under either the de facto corporation doctrine or the corporation by estoppel doctrine.
Under either doctrine, the owner must make a good-faith effort to comply with the incorporation requirements and must operate the business as a corporation without knowing that the requirements have not been met. If the owner has done so, then the business entity is treated as a de facto corporation, and the owner, as a de facto shareholder, is not personally liable for obligations incurred in the purported corporation’s name. Note, however, that the RMBCA has abolished the de facto corporation, as have many jurisdictions that have adopted the RMBCA.
What is corporation by estoppel as a defense?
under corporation by estoppel, a person who deals with an entity as if it were a corporation is estopped from denying its existence and is thereby prevented from seeking the personal liability of the business owner. This doctrine is limited to contractual agreements
