A group of person called as promoters have submitted an application to the Registrar of Companies, New Delhi for getting a company incorporated as a public company. Pending, the Registrar’s decision of granting certificate of incorporation, the promoters enter into certain contracts for the purchase of some assets for the proposed company.
- Explain the legal position of promoters’ liability and the liability of the proposed company after its incorporation, in this regard?
Answers
Q:- Explain the legal position of promoters’ liability and the liability of the proposed company after its incorporation, in this regard?
=> Promoters are generally held personally liable for 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.
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Answer:
A breach of contract
Explanation:
Promoters are usually held personally liable for pre-incorporation agreement. If a company does now not ratify or adopt a pre-incorporation agreement under the precise alleviation Act, then the common regulation principle would be relevant and the promoter could be chargeable for breach of contract.
A agreement case normally comes before a judge due to the fact one or each parties claim that the settlement was breached. A breach of agreement is a failure, with out criminal excuse, to carry out any promise that forms all or a part of the agreement.
What is breach of contract?
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A group of person called as promoters have submitted an application to the Registrar of Companies
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