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  • CHARTS Company Law CHAPTER 3

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    khomala rueban
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    This document summarizes key aspects of pre-incorporation contracts. It discusses how rights and liabilities under a pre-incorporation contract can transfer from the promoter to the company once it is incorporated through the legal principle of novation. It also outlines the fiduciary duty promoters owe to the company, including the duty to act in the company's best interests and provide full disclosure of any profits obtained related to transactions for the proposed company.

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    CHARTS_Company_Law_CHAPTER_3

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    This document summarizes key aspects of pre-incorporation contracts. It discusses how rights and liabilities under a pre-incorporation contract can transfer from the promoter to the company once it is incorporated through the legal principle of novation. It also outlines the fiduciary duty promoters owe to the company, including the duty to act in the company's best interests and provide full disclosure of any profits obtained related to transactions for the proposed company.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    7 views1 page

    CHARTS Company Law CHAPTER 3

    Uploaded by

    khomala rueban
    This document summarizes key aspects of pre-incorporation contracts. It discusses how rights and liabilities under a pre-incorporation contract can transfer from the promoter to the company once it is incorporated through the legal principle of novation. It also outlines the fiduciary duty promoters owe to the company, including the duty to act in the company's best interests and provide full disclosure of any profits obtained related to transactions for the proposed company.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Chapter 3 Pre Incorporation contract

    Pre Incorporation contract

    NOVATION
    - rights transferred from the promoter to the company

    Pre Incorporation
    Promoters Company
    Contract

    1. Can a company be entitled to 2. Duty of promoter as fiduciary


    benefits
    - A promoter owes a fiduciary
    Kelner v Baxter – promoter will duty to the company that he
    be personally liable helps form

    S51 CA 2006 - A promoter is to act in the best


    interest of the company
    - promoter personally liable
    subject to agreement to the
    contrary - Erlanger v New Sombrero
    Phosphate full and frank
    disclosure of any profits
    Phonogram v Lane obtained by the promoter
    from the proposed transaction
    - a contract can be made on
    behalf of a yet to be formed
    company

    5 www.bac.edu.my

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