Equity Structure List the number of shares that the corporation is authorized to issue and the number of shares that will initially be issued to shareholders. The central theme of this study remains whether the new Companies Act provides adequate solutions to the problems that frequently arise from the conclusion of pre-incorporation contracts, and whether the shortcomings that exist in current and previous legislation have successfully been addressed by the new Act.
Purpose Many countries require a corporation to state its purpose quite specifically, and will not allow it to operate outside of that purpose.
However, a pre-incorporation contract carries an additional layer of risk for the parties and should only be entered into following the receipt of experienced legal advice. The fact that neither party was aware the company was not yet incorporated meant they could not have had s.
It is crucial to obtain legal advice, which should include the solicitor checking to see if the company purporting to enter the agreement has in fact been incorporated. Judge Klein of the High Court took a restrictive approach to the interpretation of s.
The South African courts have offered insight into the difficulties relating to the various statutory arrangements and explored alternative methods to supplement these statutory provisions.
Name each shareholder and list the number of shares held by each. Most states require the registered agent to reside in the state of incorporation. Don't state the corporate purpose narrowly unless you have solid business reasons for doing so, because a narrow statement of purpose, if reflected in the Articles of Incorporation, can unnecessarily limit the corporation's flexibility.
It reads as follows: 51 Pre-incorporation contracts, deeds, and obligations 1 A contract that purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.
The proposed reforms as introduced by section 21 are therefore welcomed. Concepts that are dealt with in this regard includes shelf companies, an agreement for the benefit of a third party the stipulatio alteriand where promoters act as principals.