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Question
Promoters Elena and Marco organize NovaPulse Technologies, Inc. and file Articles of Incorporation with the SEC. Before a certificate is issued, they hold an organizational meeting and elect D1 and D2 as directors to manage the company’s affairs for the initial year. D1 signs a Consulting Agreement with PixelWorks, Inc. on behalf of NovaPulse. The certificate of incorporation is later issued under NovaPulse Technologies, Inc., but with a minor designation variance (NovaPulse Technologies, Inc. vs NovaPulse Technologies, Co.). PixelWorks sues for payment. In light of the pre-incorporation election of directors, answer: (a) Are D1 and D2 validly elected directors who can bind NovaPulse to the Consulting Agreement? (b) What is the effect of the pre-inc acts and the designation variance on the contract and on other acts signed by D1 prior to incorporation? (c) If NovaPulse is not bound, what remedies does PixelWorks have and what is the effect on the contract? Also discuss whether the corporation can ratify or adopt the pre-inc acts and how that affects liability.