Company Law legislation Essay Example | Topics and Well Written Essays - 3000 words

Company Law legislation - Essay ExampleA become which purports to be made by or on behalf of a bon ton at a clock clock when the company has non been organise has effect, subject to any agreement to the contrary, as one made with the soul purporting to act for the company or as agent for it, and he is personally liable on the sign accordingly.The UK legislation provides that promoters are personally liable on pre-incorporation trim downs, a reform of the common law bearing which made indebtedness of the promoter dependent on the manner in which the contract was signed. (Mrs. Janet E. Morgan)2As the company genus Beta confine was not in existence, at the time the call for contract was entered into whether surface-to-air missile cosmos the promoter is liable on the contract depends on the capacity in which he purported to sign the lease contract. Since the contract was signed by Sam as promoter using the wordings on behalf of Beta Ltd, it apprize be assumed that he signe d the contract in his personal capacity and hence, he becomes personally liable, under the contract for any consequences. This position was confirmed by the court in the depicted object of Phonogram exceptional v Lane3The position would be different if he has signed as Beta Limited per Sam then it amount to his signing on behalf of the company. In this case he will not be liable as he has signed on behalf of a company which does not exist.Liability of Beta LimitedSince the contract was signed by Sam using the words on behalf of Beta Ltd the company does not become liable on the lease agreement as was decided in the case of Phonogram Limited v Lane However since the company has continued to pay the lease rent after occupying the exposit it amounts to ratification of the action of Sam in leasing the premises on behalf of the Beta Limited entered into prior to incorporation. At the point when Gamma limited wants Beta Limited to quit it cannot pass on any liability arising there from to Sam under the plea that the contract is entered into prior to incorporation.Another example to illustrate this case is the decision In Newborne v Sensolid (GB) Ltd4 Here a contract was entered by the plaintiff company with the contract signed as Leopold the promoter as Yours faithfully, Leopold Newborne (London) Ltd. The court held that neither the company nor the promoter could compel the suspect to enforce the contract as the contract was neither purported to be signed by the company nor the promoter. save another case that proves the invalidity of the contract if the company was not in existence at the time the contract was entered into can be seen in the case of Cotronic (UK) Ltd v Dezonie5 where Dezonie signed a contract for and on behalf of his company and unknown to him the company was struck off the register about years earlier. On cunning this that the company was no more in existence, Denzonie registered another company in the same name and essay to interpret s. 36c to his advantage. The court held that s. 36c would not be applicable as the case was relating to a company that had been formed many years before. The decision of the court in the case of Oshkosh BGosh v Dan Marble Inc and Another6 is also