Pre Incorporation Contracts: A Comparative Analysis of

Indian and German Laws

Introduction:

The Company is a legal entity or device normally adopted to establish a business enterprise as an

independent legal entity capable of employing people and of buying and selling goods and

services in its own right capable in law of owning property, conducting business and entering

into contracts with other parties and capable of being bought and sold and inherited by

successive owners. The company is in fact a preferred choice of business structure mainly

because it offers many distinct advantages like limiting liability, independent corporate

existence, opportunity to raise public funds etc. The company which is concern to us now is what

is known as registered company. This is because it is brought into existence by registration of

documents the most important of which is the memorandum of association and the articles of

association.

Pre- incorporation contracts are contracts purported to be made on behalf of a company which is

yet to come into existence. Pre- incorporation contracts are also referred to as preliminary

contracts or preliminary agreements.

Statement of Problem:

In Indian Law under the Section 33 of Company Act of 1956 the concept of pre- incorporation

contracts is mentioned but after the amendment of the companys Act in the Company Acts 2013

the concept of Pre- Incorporation Contract is not at all mentioned.

Scope of the project

A comparative outlook of the laws might thereof be some help to the Student community to

understand the concept and related laws in different countries. It will also help to understand

what are the changes can be brought by the legislators to avoid the ambiguity in this area.

Aim of the Project

The Researcher in this paper sought to compare the laws present on the pre-incorporation of

contracts in India and Germany. The attempt has been to look at the controversies and

uncertainties created due to conflicting judicial interpretations in case law and half- hearted

legislative attempts.

Research Questions:

1. Is there any difference in the laws related to pre-incorporation contracts in India and

Germany? If yes what are the basic difference in the laws?

2. Why the concept of pre-incorporation is not mentioned in the Companys Act 2013?

Chapterisation:

Introduction

This will cover the introduction to the concept of pre- incorporation contract. It will deal with the

how the concept evolved from the common laws to other countries.
Chapter 1 Concept of Pre- Incorporation in Indian context

This chapter will deal with the concept of pre-incorporation in Indian Laws. Is pre-incorporation

valid in India or not? What are essentials of the pre-incorporation contract? It will also deal with

various case laws present.

Chapter 2 Concept of Pre- Incorporation in German context

This chapter will deal with the concept of pre-incorporation in Geman Laws. Is pre-incorporation

valid in Germany or not? What are essentials of the pre-incorporation contract? It will also deal

with various case laws present.

Conclusion

The problems of pre-incorporation contracts have never been treated as difficulties of a highly

specialised nature. A rule like that in Kelner v. Baxter springs from an attempt to deal with such

contracts within the framework of the usual contractual rules when the only practical solution is

to regard them as sui generis. There is no reason why this important field of commercial law

should remain neglected, technical and rigid. The various aspects of the subject should be

revised; a solution based on a practical approach, tackling the problem sui generis might be of

great help to the commercial and legal world.