DEFINITION of 'De Jure Corporation'

A de jure corporation is a fully incorporated company, which indicates that all of the statutory requirements for properly forming a corporation have been fully met.

BREAKING DOWN 'De Jure Corporation'

De jure, meaning "a matter of law," indicates that a corporation is a valid legal entity, and therefore entitled to hold board of director’s meetings, issue stock to shareholders and begin conducting business.

In comparison, a de facto corporation is a company that a court will treat as a legal corporation, even though it may not have been properly incorporated. The concept usually applies to individuals who have entered into a contract on behalf of a corporation which did not legally exist because all the boxes had not been ticked. Being recognized as a de facto corporation shields them from personal liability.

Corporation by estoppel is another common law doctrine that is designed to some protection to the officers and shareholders of a company that was not properly established and cannot be considered either a de jure or de facto corporation. Basically, when someone has been doing business with an entity in a manner that suggests they assumed the business was a corporation, they cannot later deny the corporate status of the company.

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