Fiducia TogetherTrading while a company is being formed
Contracts made before the company exists. The person who signs is personally liable.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
A pre-incorporation contract is one purported to be made on behalf of a company that has not yet been formed.
Why it matters
Under section 51 of the Companies Act the person who made it is personally liable, and the company cannot simply adopt it — it must be novated.
What it looks like in practice
Wait for incorporation, or contract personally and novate afterwards with the counterparty's agreement.
What to watch out for
Leases and finance agreements signed in a company name before incorporation, which bind the individual.
Where to get proper advice
A solicitor, and do not sign anything in a company's name until you have the certificate.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.