Question

Nature of profit prior to after incorporation

Answer 1

Answer:

• Profit prior to incorporation is the profit earned or loss suffered during the period before incorporation. It is a capital profit and not legally available for distribution as dividend because a company cannot earn a profit before it comes into existence.
• Profit of a business for the period prior to the date company into existence is referred to as Pre-Incorporation profit. ... It is a capital profit and not legally available for distribution as dividend because a company cannot earn a profit before it comes into existence.

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