How Do You Spell DE FACTO CORPORATION?

Pronunciation: [də fˈaktə͡ʊ kˌɔːpəɹˈe͡ɪʃən] (IPA)

The phrase "de facto corporation" is commonly used in law to describe a company that operates as though it were a legitimate corporation, despite not being formally incorporated. The spelling of "de facto" is phonetically transcribed as /di ˈfæktoʊ/, with emphasis on the first syllable. The word "corporation" is phonetically transcribed as /ˌkɔrpəˈreɪʃən/, with emphasis on the second and fourth syllables. The correct spelling and pronunciation of this phrase are important for legal professionals and anyone else who may encounter it in their work or studies.

Meaning and Definition
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DE FACTO CORPORATION Meaning and Definition

  1. A de facto corporation refers to an enterprise that functions as a corporation despite lacking proper legal recognition or compliance with formal incorporation requirements. This term is typically employed in common law jurisdictions and is often used interchangeably with "corporation by estoppel."

    A de facto corporation arises when a group of individuals conducts business as if they were a legally recognized corporation, even though they have not completed the necessary legal steps for incorporation, such as filing articles of incorporation with the appropriate governmental agency. Despite not having followed the prescribed procedures, the individuals in question act as if they possess the legal status and rights of a duly incorporated entity.

    The concept of a de facto corporation provides some measure of protection to innocent third parties who engage in transactions with the purported corporation without knowledge of its noncompliance with formal legal requirements. Under certain circumstances, the law may recognize the enterprise as a de facto corporation, affording it certain legal rights and obligations in order to avoid unfairness or prejudice to the parties involved.

    However, it is important to note that the recognition of a de facto corporation is typically a question of fact, and various legal factors are considered to determine its existence. These factors may include the actions and intent of the parties, whether they held themselves out as a corporation, and the reasonable belief of third parties regarding the entity's corporate status and authority.

    In summary, a de facto corporation is an entity that functions as a corporation in practice, despite lacking legal recognition due to noncompliance with incorporation requirements.