Reference no: EM131965005

Bill, Bob, and Bonnie decided to form the "3-B Delivery Corporation." The applicable state incorporation statute required three incorporators and further required that all three incorporators be residents of the state. All three signed the articles of incorporation; but Bonnie was not a resident of the state. Nevertheless, they carefully filed the articles on their own. They then had directors' and shareholders' meetings, opened up a corporate bank account with $5,000, and issued stock to themselves. They also purchased the legal minimum of liability insurance. They commenced corporate business. Unfortunately, one of the "corporation's" delivery trucks negligently injured Natasha, who brings suit against Bill, Bob, and Bonnie individually. They are now quite concerned since the state, which noticed Bonnie's non-resident status in the articles, has now returned the articles unapproved, pending clarification of the residency issue. What is the most accurate statement about the lawsuit?

A.Natasha prevails since the articles were not approved by the state and thus no corporation was formed.

B.Natasha prevails since Bonnie was not a resident.

C.Bill, Bob, and Bonnie prevail due to the de facto corporation doctrine.

D.Bill and Bob are exonerated but Bonnie must pay all the damages since she was not a resident.