You and three of your friends have entered negotiations with Toyota Motor Sales USA to acquire...

You and three of your friends have entered negotiations with Toyota Motor Sales USA to acquire a Lexus, automobile dealership. You plan to operate the dealership as a corporation, to be named Community Lexus, Inc. You and your three friends have not yet formed the corporation. You will be the president and CEO of the corporation. Among the many agreements that will be signed are a contract to purchase automobiles from Toyota, joint advertising agreements with Toyota, and loan contracts with Genesee National Bank. What should you do before you sign any of these contracts on behalf of Community Lexus, Inc.?

what sort of pre-incorporation contracts or other documents there should be before you, as president of Community Lexus, Inc., commits the not yet set up corporation to anything. How do these documents protect you from personal liability? What types of documents should there be? Be very specific and explain each document, and the purpose of each.

Expert Solution

A Thumbs Up! Would be really helpful for me. If you have any questions, please leave a comment and I will get back to you as soon as possible.

Before you put yourself in these contracts on behalf of the company you should consider some basic things which need to be taken seriously before starting any business. You need to look at the market demand of the product you are going to start your business with and if it is having high demand then only it will going to provide you benefit which you are looking for and you also need to you choose a preferable location for your business as if you choose a location which gives an advantage to your product will lead to greater success in future as well as it will increase of sales as well and help you to complete your competitors quite easily.

every document related to your cooperation is very important as it is proof that your corporation is having a legal existence. Documents like a certificate of the incorporation of your business are very crucial and it will help you a lot in your future transactions. With the help of these documents, you can take off your personal liabilities as well. personal liabilities are those liabilities that are taken for the personal uses and if you are not able to repay that liability then with the help of your operations document you can pay them the amount or convince them to give a letter more time for repayment of the liability.

keosha answered 6 months ago

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