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What is an incorporation agreement?
An incorporation agreement is an important document when a company takes steps to incorporate. ... The incorporation agreement exists prior to the directors filing formal Articles of Incorporation in the state in which the business plans to be established.
What is a pre-incorporation agreement?
A pre-incorporation contract is one which is purportedly made by or on behalf of a corporation at a time when the corporation has not yet been incorporated. ... When the pre-incorporation contract is made, the corporation is not in existence and therefore cannot be a party to the contract.
What are pre-incorporation contract?
A pre-incorporation contract is one which is purportedly made by or on behalf of a corporation at a time when the corporation has not yet been incorporated. ... When the pre-incorporation contract is made, the corporation is not in existence and therefore cannot be a party to the contract.
Are pre-incorporation contracts enforceable?
Going by the act specific performance of a contract is enforceable against a company where its promoters or agents have entered into a valid contract on behalf of the company before its incorporation. In such a situation a contract is acceptable by the stipulations of the company's incorporation.
Can a company ratify the contracts of promoters who acted on behalf of the company before its incorporation?
Preliminary Contracts by Promoters. (b) made by a person on behalf of a company before and in contemplation of its incorporation. Until the company is incorporated it cannot contract or do any other act.
Is a company bound by pre-incorporation contract?
A pre-Incorporation contract is a contract that is entered into by a person who is acting on behalf of a company that does not exist. The person entering into the agreement has the intention that once the company comes into existence the company is to be bound by the provisions of the pre-incorporation contract.
Can a company ratify a pre-incorporation contract?
If a company does not ratify or adopt a pre-incorporation contract under the Specific Relief Act, then the common law principle would be applicable and the promoter will be liable for breach of contract.
What is pre-incorporation contracts in company law?
PRE Incorporation Contract Law and Legal Definition. A pre-incorporation contract is one which is purportedly made by or on behalf of a corporation at a time when the corporation has not yet been incorporated.
Who is a promoter for a company before its incorporation?
A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.
What is incorporation of a company?
Incorporation is the legal process used to form a corporate entity or company. A corporation is the resulting legal entity that separates the firm's assets and income from its owners and investors. ... It is the process of legally declaring a corporate entity as separate from its owners.
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