4. X, a promoter of a corporation created to do business as a shopping center, c
ID: 383151 • Letter: 4
Question
4. X, a promoter of a corporation created to do business as a shopping center, collects a 20% commission on the sale,of land to the corporation. X does not inform the directors of the corporation. Can X keep the commission? Explain 5. A, B, and c hire attorney Y to incorporate their dry cleaning partnership. Al1 formal steps for incorporation are taken ex- cept publication of the articles in a egal newspaper and filing of the articles with the register of deeds in the county of the corporation's principal place of business. A, B, and C rely on Y to take al necessary steps and believe the procedures have been completed. Thereafter, a customer is seriously injured by dry cleaning fumes. Can the customers sue A, B, and C personal 1y on the theory that the corporation is not validly formed and A, and C are still operating as partners? Explain.Explanation / Answer
4.
Initially, it is possible that X can keep the commission if the company directors are not active or if they do not monitor the daily working process of the organization. However, if the auditing or scrutinizes are done of all the reports from the landowners then it can be caught that X was taking the 20% commission for the sale of the land to the corporation.
5.
As A, B and C have not published the article in the legal newspaper and also to the registering of deeds to the countries principal of corporation for placing the business the legal proceedings can be easily taken to them by the customers because a customer has badly injured by dry cleaning fumes. All the process is required to thoroughly process by the organization so to ensure a good service and in this case, the customers should go for legal proceedings to take actions against the non-validity of the corporation.
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