Asked by Abbas Ghaderi on Apr 25, 2024
Rice is a promoter of a corporation to be known as Dex Corp.On January 1,1985,Rice signed a nine-month contract with Roe,a CPA,which provided that Roe would perform certain accounting services for Dex.Rice did not disclose to Roe that Dex had not been formed.Prior to the incorporation of Dex on February 1,1985,Roe rendered accounting services pursuant to the contract.After rendering accounting services for an additional period of six months pursuant to the contract,Roe was discharged without cause by the board of directors of Dex.In the absence of any agreements to the contrary,who will be liable to Roe for breach of contract?
A) Both Rice and Dex
B) Rice only
C) Dex only
D) Neither Rice nor Dex
Promoter
An individual or company responsible for organizing and financing the initial operations of a business venture or organizing events, often taking significant financial risks.
Incorporation
The process of legally declaring a corporate entity as separate from its owners, providing protection from personal liability and other benefits.
Accounting Services
Professional services involving the management of financial records, including bookkeeping, auditing, and preparation of financial reports.
- Discern the accountability of promoters and incorporators in connection with contracts initiated preincorporation and post-incorporation.
- Acknowledge the function of promoters prior to the establishment of a corporation and their level of accountability.
Learning Objectives
- Discern the accountability of promoters and incorporators in connection with contracts initiated preincorporation and post-incorporation.
- Acknowledge the function of promoters prior to the establishment of a corporation and their level of accountability.