b.$hree features of a
corporation are: 1 good faith attempt to comply with incorporation statute 2 business had a legal right to incorporate 3 principals of the corporation acted in good faith as a corporation
Sarah an" Sa have a trucing copany. They try to for a corporation* ut their !a$yer "ies +ust prior to fi!ing the Artic!es of Incorporation. Sa an" Sarah "on,t rea!i%e the corporation $as never fore". It is !ie!y it $i!! e fore" a
corporation. They hit a!! three re-uireents.
status:is going to insulate directors and s(h from liability %ust as if they were a corporation d.8owe'er, the
doctrine would rarely apply today, because the state must appro'e the articles before they are filed, and a statement by the Secretary of State of the fact of incorporation is conclusi'e e'idence of incorporation.3.
Corporation y Estoppe!
status:9ight still be protected under estoppel doctrine b.$his arises when:if creditor treats a business as a corporation, the creditor is estopped from alleging that corporation was defecti'e and he could get to principals to hold them personally liable c.$he re7uirements for corporation by estoppel are:1 D must ha'e held out as a corporation 2 acted as a corporation 3 honest belief that he or other principals were corporation d.$he estoppel doctrine is not a defense to:tort claim because person with tort claim would not ha'e notice. e.0t generally arises in:contract claims where prior business relationship e&ists
onsidering the facts of the pre'ious e&le, if the company ordered computers from Dell and are unable to pay, e'en though they are not an actual corporation, they may be protected by both estoppel and
status. 8owe'er, if a truc dri'er hits a pedestrian and breas that person+s legs, the company may be protected by
status but will not be protected by estoppel, because the 'ictim will not ha'e had notice of the trucing company acting lie a corporation.4.
a.$his is when the corporation is:acting beyond the scope of its authority in the A0 and the action can be en%oined b.imited in alifornia by:ultra 'ires cannot be raised as a defense by a corporation or shareholder against third parties in'ol'ing any contract to which corporation is party. $he primary remedy is to hold the responsible persons liable for damages
$he articles of incorporation of Bertos orp. prohibit the corporation from incurring any debt greater than ;1<<,<<<. $he corporation+s board of directors appro'es the purchase of property worth ;3!<,<<<. 0n connection with Bertos+ application for a ;1!<,<<< mortgage to finance the property, irst 5ational Ban re7uests a copy of the corporation+s articles of incorporation. 0t then appro'es the loan. 9ay Bertos+ shareholders challenge the loan on the grounds that it was