This is a reminder that a person (company or individual) who enters into, or purports to act for, a company still to be incorporated under the Companies Act 2008 is jointly and severally liable for liabilities under the pre-incorporation contract if the entity is not incorporated or doesn’t fully adopt the pre-incorporation agreement.

Section 21 of the Companies Act 2008 changed this law. A person signing the pre-incorporation contract is liable to the extent that the company does not completely, partially or unconditionally ratify the pre-incorporation contract within three months of incorporation, or if the company is not incorporated at all.