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Question
True/False Answer Question:
A company can ratify preliminary contracts after incorporation.
Options
True
False
MCQ
True or False
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Solution
The statement is FALSE.
This is because a preliminary contract is signed before the incorporation of a company. These are contracts which the promoter undertakes with the third party during the company’s promotion. Thus, the company cannot ratify preliminary contracts after incorporation and cannot also be forced to honour these contracts.
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