Asked by Aaron Morris on Jun 13, 2024
Verified
A corporation is required to reimburse a promoter for her reasonable expenses incurred on behalf of the corporation prior to incorporation.
Promoter
A person or entity that initiates the establishment of a company by finding investors, preparing contracts, and registering the business.
Reimburse
To reimburse is to pay back or compensate someone for expenses they have incurred.
Incorporation
The process of legally declaring a corporate entity as separate from its owners.
- Comprehend the duties and liabilities of corporate officers, the board of directors, and promoters towards the corporation and third parties.
Verified Answer
ZK
Zybrea KnightJun 14, 2024
Final Answer :
False
Explanation :
A corporation is generally not required to compensate a promoter for her promotional services,or even her expenses,unless the corporation has agreed expressly to compensate the promoter.The justification for this rule is that the promoter is self-appointed and acts for a corporation that is not in existence.
Learning Objectives
- Comprehend the duties and liabilities of corporate officers, the board of directors, and promoters towards the corporation and third parties.
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