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Date Submitted: 08/20/2011 11:57 PM

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A pre-corporation contarct is one which is entered into when the Company is in the process of being incorporated but is not yet completed it. At common law such contracts were held to be void, as the Company is not yet in existence.Newborne v Sensolid [1954]

IN the case of Kelner x Baxter [1866] certain individuals were purportedly acting on behalf of the Gravesend Royal Alexandra Hotel Co. Ltd which was in the process of being formed. The individuals entered into a contract for the purchase of wine from K.The wine was delivered to the Company after its formation but before K was paid the Company went into liquidation.

The Court held that the Company was not liable but the individuals were personally liable as they had entered into contracts before the Company came into existence.

In the case of Phonogram v Lane [1982], before incorporating a company called Fragile Management Ltd.L contracted with the Plaintiff for a loan of 12,000 to finance a pop group called Cheap, Mean & Nasty. The Plaintiff wrote to L in which reference was made to him undertaking to pay. He neverthelss was required to sign and return a copy for and on behalf of Fragile Management Ltd.The Company was never performed and the group never performed.

The Court held that the defendant was personally liable to repay the money advanced.

The above problems were overcome when the legislation was enacted in the form of Sect35(1) and Sect 35(2) of the Companies Act 1965.

Incorporation (Inc.) is the forming of a new corporation (a corporation being a legal entity that is effectively recognized as a person under the law). The corporation may be a business, a non-profit organization, sports club, or a government of a new city or town. This article focuses on the process of incorporation; see also corporation

Director" includes any person occupying the position of director of corporation by whatever name called and includes a person in accordance with whose directions...