Study On Pre-incorporation Contracts

Pre-incorporation contracts are those contracts between promoters and the third party in order to establish a new corporation. Pre-incorporation contracts are necessary for any newly-established corporation. Not only does it have great influence on the transaction security, but also it relates to the rights and liabilities of promoters, the third party and the newly-established corporation. As a result, pre-incorporation contracts differ from common contracts or agreements. It is significant to study on pre-incorporation contracts.Since the Company Law of People's Republic of China (2005) entered into force on January 1st, 2006, more than two years has passed by. However, the rules of pre-incorporation contracts are still in the same status as before. What's worse, so far, there are no interpretations on pre-incorporation contracts in effect at all and there are little academic discussion on this subject in our country. Situations in the U.K and the U.S. are totally different. They get a complete and concrete system of pre-incorporation contracts. So this article is based on the comparison of pre-incorporation contracts in the U.K. and the U.S.Except the preface and the epilogue, this article is divided into three parts.Part one tells a normal case of pre-incorporation contracts. Through analysis of the case, the author begins her research on pre-incorporation contracts. And then, the author introduces the statutory rules of pre-incorporation contracts in China and analyses the defections of these rules. What's more, the author also introduces some related normative documents, especially the Supreme People's Court on Several Issues Concerning the Trial of Company Cases (draft for soliciting opinions), and makes an analysis of them.Part two introduces the common law rules and statutory rules in the U.K. and the U.S. After the introduction, the author makes a comparative analysis of these two and puts forward her own opinion.Part three is about the concrete proposes of the author on the construction of pre-incorporation contracts in China. The author holds that the concept of pre-incorporation contracts should be written into the statutory law and pre-incorporation contracts should not be invalid. Meanwhile, promoters should take the main liability for pre-incorporation contracts. The author still holds that we should learn from the U.K. and the U.S. to distinguish liabilities of different persons for pre-incorporation contracts according to different types of pre-incorporation contracts. And also we can introduce "the ratification theory" in the U.S. to our country. And then, the author holds that we should make particular rules on pre-incorporation employment contracts. At last, the author sets forth some complementary measures, such as a reasonable period of ratification, the legal reasons for promoters free from liabilities and the burden of proof, the concrete liabilities between promoters or promoters and the newly-established corporation, the liabilities when the corporation is claimed invalid, the liabilities when action occurs and incorporation is still in process, and so forth.