LEGAL REALITIES OF PRE-INCORPORATION CONTRACTS UNDER CAMA 2020

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BEFORE THE COMPANY IS BORN: LEGAL REALITIES OF PRE-INCORPORATION CONTRACTS UNDER CAMA 2020

FAOLA DIVINE BRIGHT AICMC

 

KEY ISSUES EXPLORED

•       Introduction

•       Definition of Pre-Incorporation Contract

•       The Common Law Position on Pre-Incorporation Contracts

•       Statutory Intervention

•       Conclusion

 

INTRODUCTION

In the dynamic landscape of Nigerian business law, the formation of a company marks a critical milestone, yet the journey often begins well before incorporation. Preincorporation contracts, entered into on behalf of a yet-to-be-formed company, play a pivotal role in laying the groundwork for future operations. 


However, these agreements come with unique legal complexities, as they straddle the line between entrepreneurial ambition and statutory compliance. The Companies and Allied Matters Act (CAMA) 2020,2 Nigeria’s principal corporate legislation, introduces significant provisions that govern the enforceability, liabilities, and implications of such contracts. 

 

This write-up explores the legal realities of pre-incorporation contracts under CAMA 2020, examining the statutory framework, the responsibilities of promoters, and the practical challenges faced in navigating these agreements before a company legally comes into existence.





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