What is the position of a pre-incorporation contracts?
Pre-incorporation Contract The promoter is obligated to bring the company in the legal existence and to ensure its successful running,; and in order to accomplish his obligation he may enter into some contract on behalf of prospective company. These types of contract are called ‘Pre-incorporation Contract’.
What is the position of pre-incorporation contract under common law?
Pre-Incorporation Contract The promoter is obligated to bring the company in the legal existence and to ensure its successful running,; and in order to accomplish his obligation he may enter into some contract on behalf of prospective company. These types of contract are called ‘Pre-incorporation Contract’.
Are pre-incorporation contracts legally valid?
These types of contract are called ‘Pre-incorporation Contract’. Therefore, Pre-incorporation contracts, though at first stage may appear to be with no legal status but they are very much legally acceptable and enforceable in the tribunal and courts.
What is the effect of pre-incorporation contracts on company and its members?
Therefore, these contracts entered by the promoters are made in their own name. Hence, these contracts are known as pre-incorporation contract or promoter’s contract. Such contracts are inevitable for company registration and therefore are also recognised by Companies Act and also by Specific Relief Act.
What is the meaning of pre-incorporation?
: existing or occurring before the formation of a corporation the preincorporation period/process preincorporation expenses a preincorporation contract.
Can a promoter earn profits during the pre-incorporation stage?
A promoter is not forbidden to make profit but to make secret profits. He may make a profit out of promotion with the consent of the company, in the same way as an agent may retain a profit obtained through his agency with his principle’s consent.
What are the duties of a promoter?
Promoter responsibilities include:
- Demonstrating and providing information on promoted products/services.
- Distributing product samples, brochures, flyers etc. to source new sales opportunities.
- Using lectures, films, charts, and/or slide shows.
How do party promoters get paid?
Partner promoters are paid on a percentage scale based on the amount of income the club earns each night. The partner promoter’s pay is determined after all expenses for the club have been paid or accounted for that night.
What are the duties and liabilities of a promoter?
The duties of promoters are as follows:
- To disclose the secret profit: The promoter should not make any secret profit.
- To disclose all the material facts:
- The promoter must make good to the company what he has obtained as a trustee:
- Duty to disclose private arrangements:
- Duty of promoter against the future allottees: