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All Jurisprudence based

0 tracked cards Commercial and Taxation Laws

LuminaTech, Inc. was formed by four incorporators who filed articles of incorporation and held an organization meeting. No formal by-laws were adopted or filed with the SEC. After several shipments, LuminaTech signs a standing contract with Orion Supplies for ongoing deliveries. Orion demands payment, contending that LuminaTech has no valid by-laws and that the officers lacked authority. Which doctrine governs whether LuminaTech may act and be bound despite the absence of properly adopted or filed by-laws?

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De facto corporation doctrine — corporate existence and power to act exist despite defective or absent by-laws if there is actual organization and exercise of corporate powers. Corporate personality by estoppel — outsiders cannot deny corporate existence when they have dealt with the corporation as such. Ratification by stockholders after the fact — acts may become binding only if stockholders ratify. De jure corporation doctrine — requires strict compliance with all incorporation formalities, including properly adopted and filed by-laws; otherwise the corporation cannot act.

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