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If a promoter makes a contract on behalf of a not-yet-formed corporation, he is personally liable to perform under the contract even after the corporation is formed and adopts that contract.

A. True
B. False

1 Answer

1 vote

Final answer:

The promoter is not personally liable to perform under the contract after the corporation is formed.

Step-by-step explanation:

The statement in the question is False. If a promoter makes a contract on behalf of a not-yet-formed corporation, he is not personally liable to perform under the contract after the corporation is formed and adopts the contract. Once the corporation is formed, it becomes a separate legal entity from its promoters or shareholders. The corporation is responsible for fulfilling its contractual obligations.

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