After it is incorporated, a corporation cannot disapprove of the contracts made by the promoter.

Name: After it is incorporated, a corporation cannot disapprove of the contracts made by the promoter.
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Question

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Before incorporation, a promoter may enter into contracts on behalf of the corporation-to-be. Once the corporation is formed, it must decide whether to adopt or ratify these pre-incorporation contracts. If the corporation does not approve or ratify the contracts, it is not bound by them.

After It Is Incorporated, a Corporation Cannot Disapprove of the Contracts