Promoter Liability

The video tutorial discusses the role of a promoter in the early stages of forming a corporation. It explains how a corporation can adopt or ratify actions taken by the promoter before its existence, thereby transferring liability from the promoter to the corporation. However, if certain actions are not ratified, the promoter may remain liable. This is particularly relevant when promoters seek endorsements or commitments from future shareholders. The concept of promoter liability is highlighted, focusing on actions not ratified by the corporation.

What happens to the liability of the promoter when the corporation ratifies the actions taken before its existence?

What actions may not be ratified by the corporation, leading to potential liability for the promoter?

In what situations might a promoter remain liable for actions taken during the formation of a corporation?

What could happen if the promoter makes promises that are not fulfilled and not ratified by the board?

Explain the concept of promoter liability as discussed in the text.