Quiz 28: Corporate Formation, Merger, and Termination
Following are the steps that help in getting corporation in to picture: • Promotional and preliminary organizational undertaking • Authorized incorporation process The person who conducts e preliminary steps in forming an organization is known as promoter. A promoter is responsible for pre incorporation of various contracts till the time the promoter is not held liable by contracting party or the corporation believes the contract through novation.
In the given case, company G has a de facto status that proves that only state can challenge the existence of corporation because Mr B is a third party. The elements that fulfil de facto status are that a state statute should validly incorporate the corporation and every state should allow this deed. The parties should have full faith try to meet statutes term.it was not clear that papers were not sent by attorney.at the end, he enterprise should consider business and consideration as same and there was an operations as company G unaware of the fact that corporate charter was never sent. Here, the brothers are innocent and must not be held responsible personally or as a corporation. They will be liable for the negligence of their employee's action.
(1)Mr B does not have any rights to stop the merger procedure because the per cent of stocks that he owned were less than the total per cent of stocks of the other members who wanted the merger to happen successfully. (2)Yes , the parties can use short form procedure of merger because that does not require the consent of all the stakeholders. Hence, in the given case there would not have been any dispute if such procedure would have followed. (3)The term that is used for the offer made by company H for merging it with company G is "company H." (5)Yes , after merging the two companies, the company H will be liable for all the actions. Company H has taken over the company G. All the stocks are in the name of company H. So all the responsibility lies on company H.
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