Pre Incorporation contract

What is the definition of a pre-incorporation contract?

• A contract entered into by a company before it is incorporated

• A contract entered into by a company after it is incorporated

• A contract entered into by a partnership before it is formed

• A contract entered into by a partnership after it is formed

Who is responsible for entering into a pre-incorporation contract on behalf of a company?

• Shareholders

• Directors

• Promoters

• Employees

Under Common Law, pre-incorporation contracts are considered:

• Valid and binding

• Invalid and void

• Valid but not binding

• Invalid but not void

According to the Companies Act 2016, pre-incorporation contracts can be ratified by the company:

• Before its incorporation

• After its incorporation

• During its incorporation

• Never

Who is personally liable for a pre-incorporation contract before it is ratified by the company?

• The shareholders

• The directors

• The promoters

• The employees

Under Common Law, a pre-incorporation contract is considered valid if:

• It is signed by the promoters

• It is signed by the shareholders

• It is signed by the directors

• It is signed by the employees

According to the Companies Act 2016, a pre-incorporation contract can be ratified by the company and become binding:

• Only if it was signed by the promoters

• Only if it was signed by the shareholders

• Only if it was signed by the directors

• Regardless of who signed it

In the case of Kepong Prospecting Ltd & Ors v Schmidt (1968) 1MLJ 170, the court ruled that a pre-incorporation contract can be enforced if:

• The company is incorporated before the contract is signed

• The company is incorporated after the contract is signed

• The contract is signed by the shareholders

• The contract is signed by the directors

Under Common Law, a pre-incorporation contract is considered void because:

• The company does not exist at the time of the contract

• The shareholders are not involved in the contract

• The directors are not involved in the contract

• The employees are not involved in the contract

Who is personally liable for a pre-incorporation contract before it is ratified by the company under the Companies Act 2016?

• The shareholders

• The directors

• The promoters

• The employees