LAW 3102 Chapter Notes - Chapter 33: Nonprofit Corporation
Document Summary
It owes its existence to a state, which also regulates it. Its management is centralized; and it is considered for some purposes. It is a legal entity separate from its shareholders, with rights and liabilities entirely distinct from theirs. Transfer of stock in the corporation from one individual to another has no effect upon the legal existence of the corporation. Title to corporate property belongs not to shareholders but to the corporation. A corporation may be formed only by substantial compliance with a state incorporation statute. Every state has a general incorporation statute authorizing the secretary of state to issue a certificate of incorporation or charter upon compliance with its provisions. A corporation is a legal entity, therefore it is liable out of its own assets for its debts. Shareholders have limited liability for the corporation"s debts- their liability does not extend beyond the amount of their investment.
