course material

1. Does she have a cause of action against the Times
QUESTIONS1. After part of the shares of a proposed corporation had been successfully
subscribed, one of the promoters hired a carpenter to repair a building that was to be
conveyed to the proposed corporation. The promoters subsequently secured subscriptions
to the balance of the shares and completed the organization, but the corporation, finding the
building to be unsuitable for its purposes, declined to use the building or pay the carpenter.
The carpenter brought suit against the corporation and the promoter for the amount the
promoter agreed would be paid to him. Who, if anyone, is liable?2. C. A. Nimocks was a
promoter engaged in organizing the Times Printing Company. On September 12, on behalf
of the proposed corporation, he made a written contract with McArthur for her services as
comptroller for a one-year period beginning October 1. The Times Printing Company was
incorporated October 16, and on that date, McArthur commenced her duties as comptroller.
Neither the board of directors nor any officer took formal action on her employment, but all
the shareholders, directors, and officers knew of the contract made by Nimocks. On
December 1, McArthur was discharged without cause.a. Does she have a cause of action
against the Times Printing Company? Explain.b. Does she have a cause of action against
Nimocks? Explain.3. Todd and Elaine purchased for $300,000 a building that was used for
manufacturing pianos. Then as promoters, they formed a new corporation and resold the
building to the new corporation for $500,000 worth of stock. After discovering the actual
purchase price paid by the promoters, the other shareholders desire to have $200,000 of
the common stock canceled. Can they succeed in this action? Why or why not?4. Wayne
signed a subscription agreement to purchase one hundred shares of stock of the proposed
ABC Company, at a price of $18 per share in a State that has adopted the Revised Act. Two
weeks later, the company was incorporated. A certificate was duly tendered to Wayne, but
he refused to accept it. He was notified of all share-holders’ meetings, but he never
attended. A dividend check was sent to him, but he returned it. ABC Company brings a legal
action against Wayne to recover $1,800. He defends upon the ground that his subscription
agreement was an unaccepted offer and that he had done nothing to ratify it and was
therefore not liable upon it. Is he correct? Explain.5. Julian, Cornelia, and Sheila petitioned
for a corporate charter for the purpose of conducting a retail shoe business. They met all of
the statutory provisions, with the exception of having their charter recorded. This was
simply an oversight on their part, and they felt that they had fully complied with the law.
They operated the business for three years, after which time it became insolvent. The

2. creditors desire to hold the members personally and individually liable. May they do so?
Explain.