McBride Law Blog

BLOG

Tagged Posts: defective corporation’

When a Corporation Fails To Exist (Legally) (Part IV)

October 27, 2016

In Hill v. County Concrete Co., Inc., Hill and Newman hired an attorney to form a construction services corporation to be known as “C&M Builders, Inc.” (C&M).[1]  The attorney advised Hill and Newman that the corporate name was available and that they could proceed with their business preparations, upon which Hill and Newman ordered checks, painted trucks, and opened a bank account, all imprinted with, or in the name of, C&M.  But for whatever reason, the attorney did not attempt to file the Articles of Incorporation until the end of February 1989, more than 3 months later, and when he did, the corporate name C&M was no longer available. … Read the rest

When a Corporation Fails To Exist (Legally) (Part III)

October 20, 2016

Corporation by Estoppel

In Cranson v. I.B.M. Corp., Cranson decided to invest in a corporation that was soon to be formed.[1] Upon being advised by the attorney that the corporation had been formed, Cranson received a stock certificate for his shares and was shown the corporate seal and minute book.  The company started conducting business, through corporate bank accounts, with auditors maintaining corporate books and records, and under a lease for the office space entered into by the corporation. … Read the rest

When a Corporation Fails To Exist (Legally) (Part II)

October 13, 2016

De Facto Corporation

Cantor v. Sunshine Greenery, Inc., a 1979 case out of New Jersey, is one of the best known cases on the doctrine of de facto corporation.[1]  In that case, Cantor was the landlord and Sunshine Greenery the tenant.  On December 16, 1974, Cantor prepared the lease naming Sunshine Greenery as the tenant, which was signed by Brunetti as president of Sunshine Greenery.  Cantor knew that Brunetti was starting a new corporation but did not request a personal guarantee from Brunetti. … Read the rest

When a Corporation Fails To Exist (Legally) (Part I)

October 6, 2016

We advise and write frequently on personal liability of business owners.  Certain entity forms, such as corporation and limited liability company (LLC), generally offer protection from personal liability for business owners.  Although we discussed in our previous blog series “LLC Law Update: Piercing the Corporate Veil” situations where courts “pierce the corporate (or LLC) veil” to hold business owners liable for business debts, veil piercing is more of an exception than the norm for properly formed and operated entities. … Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.