Saturday, October 04, 2008

The Lord's Provision

I've blogged a few times about things I've found in my textbooks back in my school days. But, I've never got around to this one.

In McGraw-Hill/Irwin's Legal Aspects of the Business Organization I found another one of these such things on page 992 that was truly a gift from the Lord.

The topic at hand is incorporation. There's a term called "corporation by estoppel" which basically means that if someone holds them self out to be acting on behalf of a corporation, then the court will "estop" him from denying the existence of the corporation. This is to protect third parties from thinking they're dealing with a corporation, when really they're not, or vice versa.

Anyway, the funny part comes when the book starts discussing liability for defective incorporation. It states:
If people attempt to organize a corporation but their efforts are so defective that not even a corporation by estoppel is found to exist, the courts have generally held such persons to be partners with unlimited liability for the contracts and torts of the business.

And, all I've got to say is, if people who want to be incorporated can't even MAKE THEMSELVES OUT TO BE incorporated, then they deserve full liability!

Hehe...I realize most of you won't think this is funny - but I sure do!

Have a fabulous Saturday!

1 comment:

tsbjf said...

I think "estoppel" is a funny word :) .