Accounting Treatments for Identifiable Intangible Assets
The central focus of this essay will be on the legal principle of pre-registration contracts. As the definition of pre-registration contracts ( in legal terms) suggests, they are the kind of contracts that are intentionally entered into, on the behalf of a company that is not yet registered. In pre-registration contracts, a person that enters into an agreement on the behalf of an unincorporated company, is known as a promoter. A promoter is the person who intends to or will generate profit from the formation or the financing as a company. This means that if a pre-registered company enters into a contract, the promoter is entitled to the benefits and incur personal liability from that contract. Therefore, this has led to the introduction of Section 131 of the corporations act. This provides a different and modern view of pre-registration contracts compared to its common law definition. Accordingly, this will lead to a discussion of the common law view of pre-registration contracts and the definition that is provided by Section 131. A large emphasis will also be placed on the role of promoters and companies as well as third parties that are involved in this particular area of law. Pre-registration contracts are now highly uncommon, due to the consequences involved, as this essay will reveal. Read more…