Companies Act 2014 section 45

Pre-incorporation contracts

Section 45 deals with contracts and other transactions entered into on behalf of a company before it has been formally incorporated, and sets out the rules for ratification and personal liability.

• A company may ratify any contract or transaction purportedly entered into on its behalf before the company was formed, including applications to any lawful authority.
• Once ratified, the company is bound by the contract and entitled to its benefits, as if it had existed and been a party to the contract at the time it was originally made.
• Before ratification, the individuals who acted in the company's name are personally bound by the contract and personally entitled to its benefits, unless there is an express agreement to the contrary.
• This provision derives from the Companies Act 1963 and ensures continuity of contractual obligations through the incorporation process.