Georgia Pre Incorporation Agreement
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FAQ
If someone is not in legal existence, then he cannot be a party to contract, and 'Privity to Contract' doctrine excludes company from the liability. In Kelner v Baxter, Phonogram Limited v Lane this position was confirmed. In pure common law sense, Pre-incorporation contract does not bind the company.
Pre-incorporation agreements, also known as promoters' agreements, outline a corporation's operations, responsibilities, and ownership before it is formally established. This type of agreement is usually made between the individuals (often referred to as promoters) involved in setting up the corporation.
There are various types of pre-incorporation contracts that can be made by a company ing to their need before incorporation, such as a lease agreement, employment agreement, founder's agreement, shareholder agreement, etc.
Ratification is done when a company confirms the pre-registration contract expressly or impliedly such as making a payment for the contracted amount. Also statutory assumptions in s 129 apply in this case as well.
Promoters are generally held personally liable for pre-incorporation contract. If a company does not ratify or adopt a pre-incorporation contract under the Specific Relief Act, then the common law principle would be applicable and the promoter will be liable for breach of contract.
Before a company is incorporated, it cannot enter into commercial contracts. Consequently, nobody can sign a contract for that company as an agent. A contract entered into by a party on behalf of a company, where that company has not yet been formed, is called a pre-incorporation contract.
Before a company is incorporated, it has no legal existence. ingly, it has no capacity to enter into a contract. The company cannot sue or be sued on a pre-incorporation contract. However, persons who conclude contracts for the unborn company can be held personally liable on such contracts.
The articles of incorporation must include the following information: Name of the corporation. Type of entity. Corporate mailing and street address. Name, street, and mailing address of the registered agent. Incorporator's name, street, and mailing address. The names and mailing addresses of the corporate directors.