All persons purporting to act as or on behalf of a corporation without authority to do so and without good faith belief that they have such authority shall be jointly and severally liable for all liabilities incurred or arising as a result thereof.
Source: L. 93: Entire article added, p. 744, § 1, effective July 1, 1994.
ANNOTATION
Law reviews. For article, "The 1985 Proposed Revisions to the Colorado Corporation Code", see 14 Colo. Law. 34 (1985).
Annotator's note. Since § 7-102-104 is similar to § 7-3-104 as it existed prior to the 1993 recodification of the "Colorado Business Corporation Act", articles 101 to 117 of title 7, cases construing that provision and its predecessors have been included in the annotations to this section.
Purpose of section is to impose personal liability upon those persons who act as a corporation without having undertaken any bona fide effort to achieve corporate status by complying with the statutory requirements for incorporation. Micciche v. Billings, 727 P.2d 367 (Colo. 1986).
If no steps to incorporate have been initiated, and, therefore, no corporation exists, an individual is personally liable for his acts regardless of his good faith belief in the existence of a corporation. Jean Claude Boisset Wines U.S.A. v. Newton, 830 P.2d 1134 (Colo. App. 1992).
The statute is intended to impose personal liability upon those persons who take it upon themselves to hold themselves out and improperly act as a corporation without having undertaken any bona fide effort to achieve corporate status. Jean Claude Boisset Wines U.S.A. v. Newton, 830 P.2d 1134 (Colo. App. 1992).
The statute is not intended to exempt an individual from liability for his personal acts where no corporate documents such as the articles of incorporation were ever prepared. Jean Claude Boisset Wines U.S.A. v. Newton, 830 P.2d 1134 (Colo. App. 1992).
Even if an individual has a good faith belief in the existence of a corporation, where no steps have been taken to initiate incorporation, an individual is personally liable for such individual's acts purportedly carried out on behalf of the corporation. This section was not intended to exempt an individual from liability for his personal acts where no corporation documents were ever prepared. Jean Claude Boisset Wines U.S.A., Inc. v. Newton, 830 P.2d 1134 (Colo. App. 1992).
This section applies only to representatives of domestic corporations, and not to agents of foreign corporations. Nat'l Ass'n of Credit Mgt. v. Burke, 645 P.2d 1323 (Colo. App. 1982).
Applied in Billings v. Micciche, 691 P.2d 1155 (Colo. App. 1984).