Q8 of 28 Page 182

Preliminary Contracts are

Preliminary Contracts are not legally binding on the company. A company after coming into existence may, if it so chooses, decide to enter into fresh contracts with the same terms and conditions to honour the contracts made by the promoters.

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6

Stages in the formation of a public company are in the following order

 7

Preliminary Contracts are signed

 1

It is necessary to get every company incorporated, whether private or public.

 2

Statement instead of the prospectus can be filed by a public company going for a public issue.