The preparation of share subscription contracts is generally subject to the rules and statutes applicable to the conclusion of the contract. A share subscription contract concluded is concluded when the Company accepts the subscription offer. In the meantime, subscriptions are a continuous offer if they are supported by reasonable considerations such as subscription promises from other subscribers. Pre-incorporation agreements usually state the intended legal name of the company. To indicate limited liability status, some states also require a suffix to be affixed to the name of the company. Before continuing with the registration process, a name availability search must be performed to determine the availability of the selected name and whether it is already in use. This can be done by visiting your state`s SOC website. ”If there was an explicit agreement that the man who signed should not be held responsible, the article would not apply. However, unless there is a clear exclusion of personal liability, § 9 (2) should take full effect. This means that in all cases such as this case, where a person claims to conclude a contract on behalf of a company not yet established, but he presses his signature, he is himself responsible for the contract. » as follows: On the letterhead of a Leopold Newborne (London) Ltd., a contract was concluded for the sale of 2000 cans of canned ham to Sensolid Ltd.

The contract was also signed ”Sincerely, Leopold Newborne (London) Ltd” The boss of the latter company was Mr. Leopold Newborne. The market collapsed and Sensolid made an effort to receive the shares, arguing that Leopold Newborne (London) Ltd did not exist at the time of signing the contract as it was not incorporated at that time; nor was the contract therein a contract that had not been entered into personally with Mr. Newborne and therefore could not be applied personally. Lord. Newboren unsuccessfully filed a lawsuit in the Court of First Instance and unsuccessfully appealed to the Court of Appeal. The court ruled that the contract was void because the company did not yet exist. Goddard CJ stated unequivocally that: ”. While this may be the case, since the business did not exist when the contract was signed, there was never a contract, and Mr.

Newborne can`t show up and say, ”Well, that was my contract.” The fact is that he entered into a contract for a company that did not exist. It therefore seems to me that the defendants can make use of their defence and that the appeal must be dismissed. In both cases, the common law principles for the pre-incorporation contract are established:  A pre-incorporation contract is void and unenforceable because an unincorporated corporation is unable to enter into the contract at all.  Secondly, the contract will be void, but it will also not bind the company, since it did not exist, but it would be personally binding on the organizer and the company could also benefit from its benefits. Once the Company has been established, the Parties may at any time request the Company`s ratification of the Preliminary Agreement or request novation. Novation is defined as the conclusion of a new contract, by which the new obligations or contracting parties are replaced by the previous contract. As part of the novation, the old contract (here the pre-foundation contract) and a new contract between the parties would be concluded. The principle of novation is also recognized under Article 62 of the Contracts Act. An ideal place of incorporation would be the state where the future company would conduct its activities with other companies. It is good to attach a draft of the statutes and statutes to the prior agreement to the foundation. 2.

A company may ratify a pre-incorporation contract or a transaction. If such a contract or transaction is approved, the Company will be bound and entitled to its favor. There may be different types of prior or pre-incorporation agreements. This could range from a co-founder agreement where the founders of a company that has not yet been founded accept their rights and obligations before starting the company. It can also be an employment contract with a manager or company secretary whose skills are required to start the business. The remuneration of the manager or secretary of the company, the obligations towards the future company, etc. would be included in this employment contract before the establishment. 1. On 16 May, A entered into a contract with Dice ltd for the purchase of a new cutting machine for Realtime`s business on behalf of Realtime. The contract provided for the payment of the purchase price of US$40,000 in monthly instalments. Realtime then used the machine and paid the deposits due at the end of May and June. In Ghana, the law allows a company to assess the adequacy of contracts entered into prior to their incorporation and to have the opportunity to ratify the pre-incorporation treaty.

Until ratification, the risk associated with pre-incorporation treaties is borne by the parties themselves. These risks can be avoided by completely avoiding pre-incorporation contracts or by expressly excluding such liability. Ghanaian is as specified in Section 13 of the Companies Act. To emphasize, I will reproduce the salient part of Article 13, which refers to the Ghanaian position: The following aspects should be addressed in the clause on the creation of the company: However, much of the debate and confusion focuses on the contract before establishment, and therefore the discussion will continue to examine this in detail. Nevertheless, it should be emphasized that one aspect of the Post-Incorporation Treaty is highlighted by the ”ratification” resulting from the pre-founding Treaty. The issue of ratification will be dealt with in detail during the discussion. The founding State refers to the place where the enterprise has its principal place of business. However, individuals may move to another state and pay the fees to do business in their home state. For example, many people choose Delaware for incorporation purposes, due to the friendly nature of the company`s legal system. A pre-incorporation contract is conceived as a temporary agreement on legal agreements prior to the founding act itself. However, as the LawTeacher website notes, such agreements can lead to complications if not carefully drafted.

It follows from the foregoing that it is the members of a general meeting or of the board of directors who may ratify an agreement of the promoter to bind the company. If, as already agreed above, the company does not ratify, the organizer is personally liable, unless this is included in the contract or otherwise as provided for in § 13 paragraph 2. . . .