From Our Readers

• Publication year: 1986
• Pages: 201
• Citation: Vol. 15 No. 2 Pg. 201

15 Colo.Law. 201 Colorado Lawyer 1986.

1986, February, Pg. 201. From our Readers

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201

Vol. 15, No. 2, Pg. 201

From our Readers

Dear Editor:

I enjoyed reading the Business Law Newsletter in 14 The Colorado Lawyer 2173 (December 1985) regarding the amendments to the Corporation Code which took effect January 1. I was surprised to note, however, that Linda Weiler omitted several important comments regarding the Code of which practitioners should be aware:

1. The indemnification provisions in new CRS § 7-3-101.5 are substantially narrower than provided in the previous Colorado law. The amendments prohibit the corporation from expanding the indemnification provisions beyond that contained in the statutes except by way of insurance policies. Previously, Colorado law specifically said that the indemnification provided for in the statute was not "exclusive." The amendments do seem to conform with the Revised Model Business Corporation Act (1984) § 8.50, however. Compare new CRS § 7-3-101.5(7)(a) with former CRS § 7-3-101(11)(o)(VI).

2. The other interesting change to the Code is contained in CRS § 7-3-104. This states:

All persons PURPORTING to act as OR ON BEHALF OF a corporation without authority so to do 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.

This, it seems, creates again in Colorado the de facto corporation and all the uncertainty that implies. Previously, Colorado law specifically only recognized de jure corporations. With new § 7-3-104, we now can have agents acting on behalf of nonexistent principals (or officers acting on behalf of non-existent corporations), providing they can do so in good faith. That is an anomaly.

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