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Flashcards in Defective Incorporation Deck (4)
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1

What is a de jure corporation?

A corporation organized in compliance with the statute

2

What is de facto corporation?

A de facto corporation may be formed if:

  1. a good-faith attempt was made to comply with the BCL; AND
  2. the corporate principals in good faith acted as if they were a corporation

 

 

3

Effect of de facto corporation?

Insulation from liabilty on contracts with 3rd party creditors

4

Corporation by estoppel

  • Parties dealt with each other in good faith, without knowledge there was a defect
  • court may hold they're a corporation and shield from personal liability