07 June 2013
I would like to have the above proper reply about incorporating the clause related to the above in the Articles of Association of a Private Limited Company.
Further is it sufficient to only pass the Board Resolution for acceptance / ratification of any pre-incorporation contracts of the promoters of the said company? or the above clause is necessary in the Articles of Association of the company?
10 June 2013
Ideally, the company can't ratify pre incorporation contracts and nor they are binding on the company. But,the company can enter into contracts that novate the previous ones. However, if the company enters into possession of any property subsequent to its incorporation,which was acquired by promoters, the contract pertaining to such contract is binding on the company. So far,haven't seen any clause in the AOA of a company which states that the pre incorporation contracts of the promoters are binding on the company.
CAclubindia
