Opinion ID: 2105627
Heading Depth: 1
Heading Rank: 6

Heading: corporation de facto

Text: A corporation de facto exists when there has been a good faith attempt to organize the corporation, statutory requirements have been colorably complied with, and the corporation has exercised the functions or conducted the business that it was organized to perform. Thies v. Weible, 126 Neb. 720, 254 N.W. 420 (1934); Haas v. Bank of Commerce, 41 Neb. 754, 60 N.W. 85 (1894). As our previous cases establish, the existence of a de facto corporation depends, to a great extent, on the degree that the entity conducts itself in accordance with its articles of incorporation. For example, a de facto corporation was found to exist in Parks v. James J. Parks Co., 128 Neb. 600, 259 N.W. 509 (1935), where the evidence established that the corporation in question held an organizational meeting, elected officers, and subsequently carried on the business of the corporation. Likewise, the corporation at issue in Thies v. Weible, supra , was held to be a de facto corporation even though two of its incorporators were infants because it was continuously engaged in carrying on the business it was incorporated to perform. Moreover, the corporation had adopted and used a corporate seal and had made and published statements as to its financial condition. See, also, Haas v. Bank of Commerce, supra (recognizing bank as de facto corporation when it conducted business under articles of incorporation for period of years). In the instant case, the evidence does not support Ethanair's contention that it is a de facto corporation. Unlike the above-cited cases, Ethanair has conducted virtually no business since its dissolution. Testimony from the shareholders of the corporation disclose that there were no shareholder meetings and that Ethanair did not possess a board of directors. Furthermore, no corporate activity took place with the exception of the bringing of this lawsuit. In addition to having no assets, the tax returns of Ethanair for the years 1990 through 1993 reflect no business activity whatsoever. In light of this continuous inaction, we agree with the district court's conclusion that Ethanair was not a de facto corporation. The second assignment of error is therefore without merit.