What is the best way of ensuring that a promoter has no liability on contracts made by him/her with third parties on behalf of a corporation?

Multiple Choice

• Ensure that the contracts have a novation clause.

• Make the corporations adopt the contracts.

• Make contracts only for existing corporations.

• Ensure that the contracts have an automatic novation clause.

ZYX Corp. issues preferred shares that it has the option to repurchase at a particular price regardless of whether the shareholder is willing to sell the shares. Which of the following is attached to the sale of the securities by ZYX?

Multiple Choice

• Dividend preference

• Right of first refusal

• Liquidation preference

• Redemption or call provision

• Automatic novation clause

Answer rating: 100% (QA)

1 Option A is valid because the promoter can be held accountable for preincorporation agreements Whi... View the full answer