| Term | Definition |
|---|
| Organizational Meeting | adopt bylaws, select officers, transact other company business Double Taxation |
| Liability | corporation is fully liable (shareholder only to extent paid for stock); if no corp, treat like partners |
| De Facto Corporation; | person must be unaware of failure to form de jure corporation, relevant incorporation statute, good faith/colorable attempt to comply and exercise of corporate privilege Note: action by the state = quo warranto |
| Corporation by Estoppel | person must be unaware of failure to form de jure corporation, one dealing with business as corporation may be estopped from denying status (BUT limited to K, not tort) |
| Bylaws | repealed by shareholders & subordinate to articles |
| Pre-Incorporation Contracts | corporation not liable UNTIL it adopts the contract → express or implied (knowingly accept benefit), promoter remains liable until novation (may have right of indemnity from corporation) |
| Secret Profit Rule | promoter cannot make a SECRET profit (these ok if not secret), sale to corp of property acquired before promoter: price paid by corp minus FMV, sale to corp of property acquired after promoter: price paid by corp minus price paid by promoter |
| Foreign Corporations | if doing business (regular course: construction/labor NOT meetings) in MA must qualify, to qualify: deliver certificate with articles info and certificate of good standing pay fees; registered office/agent; annual report of condition, Consequences of not: civil fine, late fees/interest/penalties; and can't sue in state (but can be sued) |
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