Pre-Incorporation Contract Problem Essay - 539 Words.
This essay will give you an overview of contract law, contract law cases and how contract law is used today.There are also examples of contract law cases and some free law essay examples. If you want to see more examples of law essays, then visit our free essays section. What is Contract Law? The law of contract is a set of rules governing the relationship, content and validity of an.
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Explain the legal provisions governing pre-incorporation contracts a) A company is regarded a legal person, distinct from its members. The fact that a person holds all or substantially all of the shares in a company does not make the company’s business that person’s business in the eyes of the law.
The new Companies Act goes on to state in section 21(3) and section 21(6)(b) that if the company, after it comes into existence, ratifies the pre-incorporation contract made on its behalf (or if the company enters into another agreement either on the same terms or in substitution for the pre-incorporation agreement) then the individual who represented the company is thereby released from all.
A promoters contract is when a promoter becomes a part of a contract as a representative of a corporation to be formed. The promoter is considered to be liable to fulfil the obligations of the corporation. It is a pre-incorporation contract.
Answer to Explain how the liability to a promoter's contract is assumed between the promoters and the corporation subject to that contract.
Ratification of pre-incorporation contract. Prior to the incorporation of a company in the Netherlands, the performance of legal acts and contracts may be necessary. According to Dutch law these legal acts can be ratified by the company subsequent to its incorporation. By ratification the company becomes liable for the ratified acts and pre.