A group of persons, called 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.[hint : pre incorporation contracts]
Answers
Answer:promoter may be made liable in a suit by an aggrieved shareholder or debenture holder for damages for deceit, besides, being liable for compensation. A promoter, even though he may only act as agent or trustee, is personally liable for the contract on behalf of the company.
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Answer:
The answer to the question -" Explain the legal position of promoters’ liability and the liability of the posed company after its incorporation, in this regard. hint : pre incorporation contracts' is-
Explanation:
Liability Of Promoter
The Promoter is the one ,who is personally liable for all contracts until the contracts have been discharged . For pre-incorporation contract ,promoters are generally held personally liable suppose a company does not adopt a pre-incorporation contract under the Specific Relief Act, then the promoter will be liable for breach of contract as the common law principle would be applicable . The dead of promoter does not free him from liabilities.
Promoter can be made liable by an debenture holder or shareholder for damages for being liable, deceit, besides, for compensation. A promoter, althoughthey act as agent or trustee, is individually liable for the contract on behalf of the company.
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