4 ms·
1) Actually in some countries it's entirely possible to attribute past actions to a new company. It sounded a bit odd to me at first, but when you think about i
by ikinone 8y ago
1) Actually in some countries it's entirely possible to attribute past actions to a new company. It sounded a bit odd to me at first, but when you think about it... why not? If a company is able to take on responsibility for something, it seems reasonable.
- hosh 8y agoIt is a difference when it comes to limiting the liability. The transactions undertaken outside of the incorporation (in the US at least) means that debt could be attributed to you personally. Your personal assets can be used to pay off the creditors ... whether you want that or not. However, if they are undertaken by the company, then creditors can get the assets that are put into the company, but not your personal assets. I don’t know which other country you are talking about or which legal structure ... even in the US, the extent of limited liability can vary depending upon which you use. There are partnerships, limited partnerships, S-corps, LLCs, sole proprietorships, etc.
- corebit 8y agoWhat you say is true, but corporations are always formed by people who are usually called "promoters". Legal liability for transactions/contracts undertaken by these promoters for the future corporation can be transferred to the corporation after it is formed with a novation agreement between the promoter and corporation (without consent of the contract partners). So there's a very clear road to what the OP wants, where transactions before corp formation belong to corp and only to corp, but yes, if that road isn't taken then liability could lie with him. Of course it all depends on state law, because in the US, corporations are creatures of the state.