Legal effect on pre incorporation contract

University of Pune. Most states require the registered agent to reside in the state of incorporation.

pre incorporation contract pdf

A pre-Incorporation contract is a contract that is entered into by a person who is acting on behalf of a company that does not exist. Pre-incorporation contracts may be undertaken by the company after its incorporation either by a incorporating the contract in the terms of incorporation, or b by entering into a fresh contract with the other party or with the promoters, or c By accepting the benefits from the contract, either expressly or impliedly.

The Companies Act provides that if the board of directors of the company has neither ratified nor rejected a particular pre-incorporation contract made or done in the name of the company within three months after the date on which the company was incorporated, the company will be regarded as having ratified that agreement.

Legal status of Pre-incorporation contract The legal status of a pre-incorporation contract is not easy to define. Photo Credits signing a contract image by William Berry from Fotolia. Select a registered agent, to whom all official communications to the corporation will be addressed.

Corporate Name The agreement should state the corporation's intended legal name. Equity Structure List the number of shares that the corporation is authorized to issue and the number of shares that will initially be issued to shareholders.

Conclusion Pre-incorporation contracts, though at first, might appear to be with no legal status and value, but they are very much important and legally valid as well as enforceable.

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Pre Incorporation Contract Law and Legal Definition