Register
Sam is a promoter acting on behalf of a corporation that has not yet been fully incorporated. Under the Revised Model Business Corporation Act, if Sam acts on behalf of the yet-to-be-formed corporation,
44.9k views
3 votes
Sam is a promoter acting on behalf of a corporation that has not yet been fully incorporated. Under the Revised Model Business Corporation Act, if Sam acts on behalf of the yet-to-be-formed corporation, who is liable in the event of a breach of contract?

User Deafgreatdane
by
4.2k points

1 Answer

5 votes

Answer:

The corporation becomes liable once formed, and Sam will be shielded from liability.

Step-by-step explanation:

Before the revised model business corporation, liabity of any contract entered to or on behalf of a yet to be formed corporation will be borne by the person or agent and not by the yet to be formed corporation.

As a result of the above mention, it has become extremely difficult for persons or agents acting on behalf of an unincorporated business thereby making them suffer for the liability of the yet to be formed corporation.

Since the revised model business corporation act has been amended, the interest of persons or agents entering into contracts on behalf of a yet to be formed corporation is now being protected as the corporation(after being formed) will now be held liable for any breach of contract and not the agent.

User Markdsievers
by
3.0k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

3.4m questions

4.3m answers

Other Questions

How can expansionary​ expenditure-based fiscal policy lead to crowding out in the​ economy? A. ​Expenditure-based fiscal policy increases the national​ debt, inducing​ forward-looking households and firms
In order to attract younger customers to the Lacoste brand of clothing, CEO Robert Siegel made all of the major decisions in product planning, distribution, and promotion. He asked for no input from his
The Yum and Yee food truck near the business school serves customers during lunch hour by taking orders and making fresh batches of stir-fry. Customers have only one choice during the lunch hour so that
At first Rohan thought it was a good idea to offer a car repair pick-up service at his auto repair shop, but then he realized that most customers called Tow-It-Now Inc. and it would be difficult to match
Robusta Coffee Importers sold 7000 units in October at a sales price of $45 per unit. The variable cost is $20 per unit. The monthly fixed costs are $8000. Using the contribution income statement format,
Link Copied!