QST LA 245 Lecture Notes - Lecture 21: Model Business Corporation Act, Treasury Stock, Registered Agent
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Document Summary
Someone who organizes a corporation is called a promoter. Promoter is personally liable on any contract he signs before the corporation is formed. After formation, corporation can adopt the contract in which case it is liable too. Promoter continues liability unless other party agrees to a novation which is a new contract with the corporation alone. Company can only incorporate under state law. No matter where a company actually does business, it may incorporate in any state. Model business corporation act was created to encourage similarity among state corporation statutes. Company is called domestic corporation in the state in which it incorporates and a foreign corporation everywhere else. If a company is doing business in several states, incorporation in delaware offers certain advantages. Once company has decided where to incorporate, the next step is to file the charter with the secretary of state in the state of incorporation.
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