Question

A preliminary contract refers to a contract made on behalf of a company____________________.

• A. Before the incorporation of the company
• B. After the incorporation of the company
• C. After the company obtains the certificate to commence business
• D. After incorporation but before obtaining the certificate of commencement of business

Answer 1

Answer: (A)

Before the incorporation of the company

During promotion of the company, the promoter of the company enters into various contracts with the third parties , such contacts are not binding on the company after it is incorporated.

All such contracts which are entered by the promoter before incorporation are called preliminary contract.