The effects of a Pre-incorporation Contract depend on a number of factors, including the terms of the contract, the laws of the state in which the corporation is being formed, and the actions of the parties involved. Some potential effects of a pre-incorporation contract may include:
Formation: A pre-incorporation contract may be used to outline the terms and conditions under which the corporation will be formed, including the roles and responsibilities of the founders and shareholders.
Obligations: A pre-incorporation contract may create legal obligations for the parties involved, including the obligation to contribute capital or resources to the future corporation.
Liabilities: Pre-incorporation contracts may also create legal liabilities for the parties involved, particularly if the contract is not properly structured or enforceable.
Ratification: Once the corporation is formally incorporated, the pre-incorporation contract may be ratified and adopted by the corporation, or it may be considered null and void if it is not consistent with the articles of incorporation or the laws of the state in which the corporation is formed.