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Essay Multiple Choice

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All Jurisprudence based

0 tracked cards Commercial and Taxation Laws

Before any certificate issues, A and B knowingly operate under a corporate name without authority and incur a supplier debt as that ostensible corporation. C later buys shares after lawful incorporation but did not participate, contract, or guarantee the debt. Which distinction is sound under Section 20 and Caram?

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A and B's knowing conduct can trigger Section 20; C's later investment alone does not establish the same liability. Only C is liable because incorporation occurred later. No one can ever incur a debt before incorporation. Section 20 applies without any knowing conduct.

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