answer this plz
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21. XYZ Co. Ltd. was in the process of incorporation. Promoters of the company signed an
agreement for the purchase of certain furniture for the company and payment was to be
made to the suppliers of furniture by the company after incorporation. The company was
incorporated and the furniture was used by it. Shortly after incorporation, the company
went into liquidation and the debt could not be paid by the company for the purchase of
above furniture. As a result suppliers sued the promoters of the company for the recovery
of money.
Examine whether promoters can be held liable for payment under the following
situations:
(i) When the company has already adopted the contract after incorporation?
(ii) When the company makes a fresh contract with the suppliers in terms of
preincorporation contract?
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