Section B - Scenario 3
GreenCanopy is a newly formed Non-Governmental Organisation (NGO) dedicated to reforestation. The founders want to incorporate the organisation to protect themselves from personal liability, but they do not intend to distribute any profits to members; all funds will be reinvested into planting trees.
Which of the following is the most appropriate business vehicle for GreenCanopy?
ACCA · Question 53 · The formation and constitution of business organisations
Section B - Scenario 3
GreenCanopy is a newly formed NGO. The founders submit their registration documents to Companies House. They begin signing contracts for tree saplings in the name of 'GreenCanopy Ltd' three days before the Registrar issues the Certificate of Incorporation.
Who is legally liable on these contracts?
Answer options:
GreenCanopy Ltd, because the registration documents had already been submitted.
The founders personally, as they are acting as promoters for an unformed company.
No one, the contracts are void and unenforceable.
GreenCanopy Ltd, but only once the Certificate of Incorporation is issued.
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