Answer to Question #264448 in Management for Carols

Question

Zurich and his friends (promoters) have submitted an application to the registrar of companies for getting a company incorporated as a public company.Pending the registrar decision of granting certificate of incorporation,the promoters enter into a certain contract for the further purchase of some assets for the proposed company.Explain the legal position of promoters liability of the proposed after incorporation, in this regard

Answer 1

In this case, the promoters are responsible for raising capital for the proposed company, and they are the generic stakeholders associated with the person who established the business. They, therefore, become liable for decisions made to enter the contractor after incorporation.