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Corp formationWhat are promoters? Subscribers?
Promoters are persons acting on behalf of a corp not yet formedSubscribers are persons or entities who make written offers to buy stock from a corp not yet formed
CorporationsWhat are the six testable issues?
Corporate formationIssuance of stockAction by and liability of directors and officersRts of shareholdersFundamental corporate changesFed securities laws
Corp formationWhat is corp liability on promotor's preincorp K?Is promoter absolved of liability then?
Corp becomes liable on promoter's preincorp K when corp ADOPTS the K by:EITHER express BOD resolutionOR IMPLIED adoption by knowledge of K + acceptance of the benefits**NO; MUST have NOVATION to replace promoter (i.e. all parties corp, 3P and promoter agree to..)
Corp formationWhat if promoter enters K and corp is never formed?What if promoter enters preincorp K, the corp is formed, and corp merely adopts the K?
Promoter ALONE is liable on K; NOT corp**Corp becomes liable AND promoter remains liable until novation
Corp formationWhat are consequences of promoters being fiduciaries?
Corp formationPromoter and secret profits problem; if promoter sells his own property to corp, what can corp recover?What tool to use for recovery?
Corp formationCan a subscriber revoke offer to buy stock in not yet formed corp?
Corp formationWhat is an incorporator?
Corp formationIn articles of incorp, what is the relationship btw purpose and duration in the purpose requirement? What is the default position? What are consequences of going beyond narrow purposes?
General purpose AND perpetual duration: valid AND presumed in absence of specific purpose and/or limited duration**If the purpose is specific, and there's an ultra vires activity?1 State can enjoin ultra vires activityAND/OR2 Corp may sue its own directors/officers for losses caused by the activity
Corp formationHow to obtain de facto corp status?
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