■that the guarantee is to contribute to the assets of
the company on winding-up while still a member or
within one year after ceasing to be a member.
Statement of proposed officers
This contains particulars of directors and secretary.
These persons have the option of having their addresses
kept on a separate record at Companies House to which
there is only limited access, e.g. to persons such as the
police. The public record can contain a service address,
e.g. the company’s registered office.
Private companies need not have a company secretary.
Statement of compliance
This can be made to the Registrar in paper or electronic
form. It does not need a witness. It is for the Registrar to
use rule-making powers to say who may make this state-
ment and in what form. It is an offence to make a false
statement.
Certificate of incorporation
When the Registrar is satisfied that all the requirements
of the CA 2006 have been complied with the documents
will be registered and a certificate of incorporation issued.
The certificate is conclusive evidence that the CA 2006
has been complied with and that the company is duly
registered as a public or private company. This means
that there can be no challenge to the validity of the com-
pany’s formation in any legal claim by it or against it.
The directors and the secretary, where there is one, are
duly appointed.
The CA 2006, in Schs 4 and 5, allows the electronic
filing of the above documents. Where this is done, the
order removes the need for witnesses to electronic sig-
natures and statutory declarations, the latter being replaced
by an electronic statement by a solicitor engaged in the
formation or a person named as a director or secretary.
Pre-incorporation contracts
Generally
A company cannot make contracts until it has been
incorporated. This takes place on the first moment of
the day of the date on its certificate of incorporation.
Transactions entered into by the company’s promoters
and others in connection with its business before that
time are not binding on the company when it is incor-
porated and the company cannot adopt these contracts
after its incorporation. Thus, if the company’s directors,
who are its agents, were to write to a seller of goods and
say that the company was now formed and would take
over a pre-incorporation contract, the company would
not be bound by it.
However, the company’s promoters or other persons
who may act for it at the pre-incorporation stage do
incur personal liability to the other party to the contract
under CA 2006, s 51.Part 2Business organisations
150
Phonogram Ltdv Lane(1981)Phonogram lent £6,000 for the business of a company to
be called Fragile Management Ltd. Mr Lane, who was
not a promoter of Fragile, signed ‘for and on behalf of’
the company a letter promising repayment by Fragile.
The company was never formed and Phonogram sued
Mr Lane personally for repayment of the sum of £6,000
under what is now s 51. The Court of Appeal decided
that Mr Lane was personally liable.
Comment.
(i)The case shows that although what is now s 51 is
usually discussed in the context of making promoters
personally liable, anyone acting on the company’s busi-
ness at the pre-incorporation stage is covered by what is
now s 51. Also, the section says that a person acting for
the company can avoid personal liability by an express
agreement in the pre-incorporation contract that he is
not to be liable. This case decides that the words ‘for
and on behalf of’ the company were not enough. They
do not amount to a specific agreement to prevent per-
sonal liability.
(ii)The Phonogram case made it clear that what is now
s 51 can apply to make a promoter or other purported
agent liable even though the company has not actually
begun the process of formation. However it was held in
Cotronic (UK) Ltd v Dezonie(1991) that there must at
least be a clear intention to form the company as there
was in Phonogram. In the Cotronic case a contract
was made by Mr Dezonie on behalf of a company which
had been struck off the register at a time when nobody
concerned with its business had even thought about re-
registering it. The Court of Appeal held that the contract
was a nullity and Mr Dezonie was not liable on it under
what is now s 51.
(iii)The words used by what is now s 51 are that the per-
son making a pre-incorporation contract is ‘personally