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Amendments
allowed, must have BOD adopt resolution and submit to shareholders for vote (also must be given written notice), and a majority of shares entitled to vote is generally necessary for approval.
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Articles of incorporation
Like a constitution, corporate existence starts when the cert. of incorp. Is issued, prepared by incorporators or promoters, must include: 1) Name of corp. 2) Period of time for the corp's existence, usually perpetual 3) Purpose 4) Share structure, including # of authorized shares 5) Address of registered office 6) Structure of BOD and names and addresses 7) Name and address of each incorporator
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Promoters
motivation force in creating the corp., owe fiduciary duty, liable on preincorporation contracts unless they are adopted by corporation.
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Ultra vires defense
cannot be used by the corp. to avoid a contract unless it is totally executory, can be used by shareholders against corp., corp. or shareholders against former or present officers to recover damages, the state attorney general against the corp.
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CORPORATE LIABILITIES
-Corps are liable under the doctrine of respondeat superior for the torts of its employees committed within the course of employment. Can be punished by fines.
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Statutory power
Having a corporate name, purchasing and holding property, making bylaws, borrowing money, and making contracts
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A corp. is formed by
applying to the state, and they get permission to operate as a corp. from the sec. of state. The issuance of a certificate of incorporation by the sec. of state is considered the start of corporate existence.
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Model Business Corporation Act (MBCA)
Model that most states use as the basis for their incorporation laws, first drafted in 1946, completely revised in 1984, individual state laws may differ.
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Quasi-public
A private corp. furnishing service upon which the public is dependent, such as a public service corp. or utility.
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Corporation by estoppel
An org. representing itself to be a corp. or a person contracting with an org. as if it were a corp. is estoppel from later denying the corporate existence.
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De facto
Corp. that has failed to comply with some provision of the incorporation law. There must be a valid statute under which the corp. could be formed, a good faith attempt to organize, and actual use of corp. power. Prevents harsh rules against individual owners
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De jure
Corporation that has generally complied with all the statutory requirements for incorporation except for an insignificant deviation from the statute that causes no harm to the public interest
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