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Pre-Incorporation & Incorporation of Company - Coggle Diagram
Pre-Incorporation & Incorporation of Company
Incorporation
Pre-Incorporation
Contracts that exists before a company is fully incorporated
Before incorporation, the company is not an entity and cannot gain contractual rights of liabilities. Rights and Liabilities fall onto promoters
Kelner V Baxter
Company has no contractual ability, contracts made on its behalf through promoters
Position in Malaysia - Companies Act 2016
Section 35 protects parties to enforce the contract against the company or persons who executed it, before and after ratification
Section 35(2)
Section 35(1)
Promoter
definition: Persons involved in starting a company
Cases showcasing promoters
Twycross V Grant
Tracey V Mandalay Pty Ltd
Duties of Promoters
Disclosure of information involving company profit
Independent Board of Directors
Existing & Intended Shareholders
To have a Fudiciary Relationship with those involved in the company
Erlanger v New Sombrero Phosphate Co.
Remedies for Breach
Recovery of Secret Profit
Damage for Breach of Fudiciary Contract
Recission of Contract