Promoters liab

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CA Gyati Gupta (Querist)
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26 April 2013 sir/madam
would the promoter continue to b liable for pre incorporation contracts in case company adopts them after incorporation bt doesnt enter into fresh contrCts!?

VISHRUT

VISHRUT (Expert)
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26 April 2013 Once company adopts it than promoter's liability ceases to be continued on such pre - incorporation contract.

However if it is justified later on that said contracts were entered into with malafied intentions than same can be considered as personal liability on promoters.

However it will not have much impact as generally promoters will continue to be the directors in the company after incorporation and as per the present scenario said liabilities will be also binding to its directors and promoters.

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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10 June 2013 Before formation of any company there cannot be any contact but if it is conversion of partnership or proprietorship into company then only the liability arises. Before that there has to be due diligence on behalf of the company and only after that the MOU is entered between the promoters and the company. If it is knowingly done with malafied intentions then the liability of the company can be shifted to the concerned persons.

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