What does the de facto corporation doctrine establish?

The de facto corporation doctrine is a legal principle that allows a business organization to be treated as a corporation despite the fact that it has not complied with all the formalities required for its formation (de jure existence). This doctrine typically applies in situations where the organizers have made a good faith effort to create a corporation but have failed to fully comply with legal requirements, such as filing articles of incorporation.

By recognizing the business as a corporation, the de facto corporation doctrine may provide certain legal protections and benefits, such as limited liability for shareholders and the ability to enter into contracts. This helps prevent third parties from being unfairly harmed due to the technical deficiencies in the corporation's formation.

The other options pertain to different aspects of corporate law. While it is true that corporations must meet specific legal requirements to achieve de jure status, that is separate from the de facto corporation doctrine's function. The other options inaccurately describe liabilities or restrictions that do not directly relate to the establishment or treatment of a de facto corporation. Thus, the correct choice reflects the unique ability of a business to be recognized as a corporation despite its failure to meet certain formal requirements.