Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
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CHAPTER 25
DEFECTIVE INCORPORATION AND
DISREGARD OF THE CORPORATE ENTITY
Section
§ 25.01 Defective Incorporation
§ 25.02 Risks of Defective Incorporation
§ 25.03 Defective Incorporation Distinguished from Disregard of the
Corporate Entity
§ 25.04 Incorporation Documentation and Disregard of the Corporate Entity
§ 25.01 Defective Incorporation
Any corporation which files articles with the Secretary of State
containing the elements required by statute and which also pays the proper
filing fees will be a de jure corporation in Minnesota. It is clear under the
Minnesota Business Corporation Act that a corporation can only exist de
jure--the Act abrogates the concept of de facto corporation.1
The de facto corporation doctrine cannot be used in Minnesota to
preserve the validity and existence of a corporation that has not met the
simple requirement for de jure status by filing its articles.
§ 25.02 Risks of Defective Incorporation
Defective incorporation occurs only if the articles lack one of the four
mandatory statutory elements or the proper fee is not paid. The risk of
filing defective articles is plain: no valid corporation comes into
existence and none of the benefits of corporate status can be claimed.
§ 25.03 Defective Incorporation Distinguished from Disregard of
the Corporate Entity
The doctrine of defective incorporation must be distinguished from
the concept of disregard of the corporate entity. The former is purely a
matter of law; the latter is a matter of equity.
A corporation is defective in Minnesota, that is, it simply does not
exist, if its articles as filed lack the required provisions or if it does not
pay the proper filing fees. A defective corporation cannot hold itself out
as a de facto corporation merely by acting like a corporation.
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman