Cap. 386 Art. 78Where certificate of registration is not issued.

(1) All persons carrying on business or entering into agreements in the name of or on behalf of a company in respect of which a certificate of registration has not been issued under this Act, or before the date indicated in the certificate of registration as the date on which the company shall come into existence, shall, unless otherwise agreed, be personally and jointly and severally liable for their dealings with third parties entered into by them in the aforementioned capacity.

(2) Failing agreement to the contrary, the persons referred to in sub-article (1) shall have, as against one another and in respect of the assets and liabilities arising out of the business carried on in the company’s name or on its behalf, the rights and obligations of joint owners.

(3) Notwithstanding the provisions of sub-article (1), the dealings referred to in that sub-article shall, with respect to a third party who has dealt in good faith with persons purporting to act in the name of or on behalf of a company in respect of which a certificate of registration has not been issued under this Act or which has not yet come into existence, with effect from the date on which the company shall come into existence, be treated as having been undertaken by the company; provided that in such an event the provisions of sub-article (1) shall not apply. The company shall be entitled to be indemnified by the persons who had acted in its name or on its behalf in respect of its liability under this sub-article towards the said third party.