Question

5) Documents for registration were filed before the Registrar of Company by the promoters of a
proposed company on 6 January. Certificate of incorporation was issued on 8th January. But
the date mentioned on the certificate was 6th January The company entered into an
agreement with Rahul on 6 January. Will the agreement be legally binding on the company?
Give reason
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Answer 1

The agreement will be legally binding on the company.

• On the date written on the Certificate of Incorporation, a business is lawfully formed and becomes a legal entity.
• They are allowed to enter into contracts which are void. The Certificate of Incorporation is a direct proof of the consistency of the incorporation of a corporation.
• Legally once the Certificate of Incorporation has been issued, the company is authentic irrespective of any fault in its registration. Thus, since the company was formed on 6th Jan it is still registered.