S.L. 234.42 Art. 19Where certificate of registration is not issued. Cap. 386.

(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 these regulations and the Companies Act, in terms of these regulations 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 subregulation (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 subregulation (1), the dealings referred to in that subregulation 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 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 subregulation (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 subregulation towards the said third party.

(4) When an agreement is entered into in the name of a company and it is expressly stated that the company is in formation, any such agreement shall be valid and binding on the parties thereto upon registration of the company and the preceding paragraphs of this regulation shall not apply.