Asked by Elisa Otero on May 19, 2024
Verified
Metro Moving Service holds itself out to customers as being a corporation but makes no attempt to incorporate. In this circumstance, the outfit is most likely
A) a corporation by estoppel.
B) a de facto corporation.
C) a de jure corporation.
D) ultra vires .
Corporation By Estoppel
A principle where a business is treated as a corporation for legal purposes, even if it failed to complete formal incorporation processes, due to its actions or representations to third parties.
De Facto Corporation
A business that operates as if it were a legally incorporated company, even though it has not completed the formal incorporation process.
- Understand the legal ramifications of errors or misrepresentations in business documents.
Verified Answer
PR
Patrice RICHARDSONMay 22, 2024
Final Answer :
A
Explanation :
Metro Moving Service would be considered a corporation by estoppel because it holds itself out to customers as being a corporation, even though it has not gone through the formal process of incorporation. This legal principle prevents the business from denying its corporate status to third parties who have dealt with it under the assumption it was a corporation.
Learning Objectives
- Understand the legal ramifications of errors or misrepresentations in business documents.