Pre-incorporation contract: A comparative analysis of the Canadian and Nigerian corporate law regimes

Abstract

The question of how best to protect the interests of a promoter, a third party, and a company in pre-incorporation contracts is one that seems to have defied corporate law. Although this problem has its origin in common law, various countries have made efforts to address it through statutory reforms. The paper, therefore, examines the extent to which the Canadian and Nigerian legal regimes for the pre-incorporation contract have provided panaceas to the problem. This paper, through a comparative analysis, argues that although the legal regimes have made efforts to reform the common law rule on pre-incorporation contracts, they suffer patent defects. It also posits that notwithstanding the defects in the laws, the Canadian legal regimes offer more protection to parties to pre-incorporation contracts than Nigerian law. The paper suggests reforms in both regimes that would meet the reasonable expectations of the parties to a pre incorporation contract.

Keywords: Pre-incorporation Contract, Promoter, Canada Business Corporation Act, Ontario Business Corporation Act, Companies and Allied Matters Act of Nigeria

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: K22

Received: 26.02.2021
Accepted: 16.06.2021
Published online: 18.06.2021

How to cite this paper: Ubochioma, W. (2021). Pre-incorporation contract: A comparative analysis of the Canadian and Nigerian corporate law regimes. Corporate Law & Governance Review, 3(1), 29-42. https://doi.org/10.22495/clgrv3i1p3