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Cards In This Set
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Promotor
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A person who, acting alone or in conjunction with one or more persons directly or indirectly takes intiative in founding and organizing the business - owes fiduciary duty
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Default Rule of Promotors
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A promotor is personally liable on a pre-incorporation K absent a contrary intent
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Executed in the name of promotor
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Promotor is personally liable
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Executed in name of non-yet formed corp and NO notice
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If fail to disclose fact to other party, promoter is liable
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Sign on behalf of corporation not yet formed and notice
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If full disclosure to other party to K, promoter may not be necessarily liable - courts look to intent of parties
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How to avoid promotor liability
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-corporation ratifies or accepts the conduct incurred by promotor
-corp accepts a benefit and estopped from denying liability -corp waives liability from the promotor for pre-incorp liability |
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De Jure corp
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Legal corp comes into existence when the certificate of incorp is issued
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De facto corp
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A corporation arising from the good faith effort to comply with the statutory requirements to establish crop
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Corporation by Estoppel
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Cannot be used as a sword
- they knew, can be used as a defense |
