Corporate Law
BABCOCK UNIVERSITY,
ILISAN-REMO,
OGUN STATE
AN ASSIGNMENT SUBMITTED IN PARTIAL FULFILMENT OF THE COURSE:
CORPORATE LAW 1 ASSIGNMENT TOPIC:
CRITICALLY EXAMINE THE EXTENT TO WHICH A COMPANY IS BOUND TO A PRE-INCORPORATION CONTRACT
SUBMITTED BY: EYESAN ORITSEMOLEBI
MATRIC NO: 10/0399
SUBMITTED TO:
MR. ABANGWU NZERIBE COURSE CODE: ACCT307
DATE: 25TH OF NOVEMBER 2012 INTRODUCTION The formation of a legal entity or a company is in simple words a matter of legal formality. A contract is that legal obligation by which a legal entity ascertains its legal status. Contracts can be considered as the basis of these formalities. As the formation of these contracts involve various discussions at different stages by more than one person pre-incorporation contracts become inevitable. A company normally will not be able to enter into a contract without coming into existence. Usually a pre-incorporation contract comes into existence prior to the formation of a company. The simple reason behind a pre-incorporation contract is that before incorporation a company a company does not have any legal existence, and if the ‘association of persons ' enters into an agreement in the name of company before incorporation; the agreement would be void ab initio. It would be a matter of inconvenience that ‘an association of persons ' cannot perform any official business operation in the name of company before its incorporation or the issue of certificate of commencement of business. Therefore the promoter can enter into a business or agreements on behalf of the association of persons or prospective company.
ILISAN-REMO,
OGUN STATE
AN ASSIGNMENT SUBMITTED IN PARTIAL FULFILMENT OF THE COURSE:
CORPORATE LAW 1 ASSIGNMENT TOPIC:
CRITICALLY EXAMINE THE EXTENT TO WHICH A COMPANY IS BOUND TO A PRE-INCORPORATION CONTRACT
SUBMITTED BY: EYESAN ORITSEMOLEBI
MATRIC NO: 10/0399
SUBMITTED TO:
MR. ABANGWU NZERIBE COURSE CODE: ACCT307
DATE: 25TH OF NOVEMBER 2012 INTRODUCTION The formation of a legal entity or a company is in simple words a matter of legal formality. A contract is that legal obligation by which a legal entity ascertains its legal status. Contracts can be considered as the basis of these formalities. As the formation of these contracts involve various discussions at different stages by more than one person pre-incorporation contracts become inevitable. A company normally will not be able to enter into a contract without coming into existence. Usually a pre-incorporation contract comes into existence prior to the formation of a company. The simple reason behind a pre-incorporation contract is that before incorporation a company a company does not have any legal existence, and if the ‘association of persons ' enters into an agreement in the name of company before incorporation; the agreement would be void ab initio. It would be a matter of inconvenience that ‘an association of persons ' cannot perform any official business operation in the name of company before its incorporation or the issue of certificate of commencement of business. Therefore the promoter can enter into a business or agreements on behalf of the association of persons or prospective company.
References: * Liability on Pre-incorporation Contracts: A Comparative Review, by Dr. Joseph H. Gross of the Faculty of Law, Tel-Aviv University. * Anantharaman, K.S., 2005, Lecture on Company Law & Competition Act (Including Secretarial Practice), Wadhwa & Company, Nagpur & New Delhi, Ninth Edition. * Bourne, Nicholas, 1998, Principles of Company Law, Cavendish Publishing Limited, Third Edition * http://www.law.uvic.ca/mgillen/315/documents/Ch15-Pre-IncContracts.pdf * http://law.jrank.org/pages/16822/pre-incorporation-contract. * ACA practice kit, FOUNDATION corporate and business law, WySE publishing. * French, Derek, Stephen W. Mayson, Finstopd and Christopher L. Ryan, 2008, Company Law, Oxford University Press, Twenty Fifth Edition * Goulding, Simon, 1999, Company Law, Cavendish Publishing Limited, Second Edition * http://lawteachers.com