Re English and Colonial Produce Co Ltd
1906 · [1906] 2 Ch 435 (CA)
Posted By lanbuk.com
- Facts
- A solicitor, on the instructions of , prepared the company's memorandum and articles and paid the registration fees. The company later went into liquidation and he claimed his costs.
- Issue
- Was the company liable for work done before it existed?
- Held
- No. The company could not have agreed to pay before it existed, and using the work afterwards did not create a contract to pay for it.
- Principle
- A company is not liable for pre-incorporation expenses unless it makes a fresh contract to pay them.
- Why it matters
- It explains why promoters' expenses need express provision.
Words and Latin in this note
- Promoter
- A person who undertakes to form a company for a project and takes the steps to set it going. Under section 50 of the Companies Act 2009 a promoter is a fiduciary and must not make an undisclosed profit. Open the note.
For study only. By lanbuk.com. Always check current sources and consult a qualified professional.