A promoter is personally liable on any contract he or she signs before the corporation is formed.

Question

Quizplus · Accepted Answer

A promoter is a person who acts on behalf of a corporation before it is officially formed. As the corporation does not exist yet, the promoter is personally liable for any contracts he or she signs on behalf of the corporation. Once the corporation is formed, the corporation assumes liability for any contracts it enters into, and the promoter is no longer personally liable.

A Promoter Is Personally Liable on Any Contract He or She