Preliminary contracts are _________.

Entered into by shareholders

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Binding on the company, if ratified after incorporation

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Binding on the company, after incorporation

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Not binding on the company

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D Not binding on the company
A contract entered into, by the promoters of a company before its incorporation is a preliminary contract. Legally, such contracts are not binding on the company after it is incorporated.

Suggest Corrections

Similar questions

Preliminary Contracts are

(a) binding the company

(b) binding on the company, if ratified after incorporation

(d) not binding on the company

A company can ratify preliminary contracts after incorporation.

Join BYJU'S Learning Program