In January 2019, James, Kate and Jennifer formed Fin Ltd (Fin). During the formation of the company, Kate and James were involved in completing the formalities needed to register the company. Jennifer was not responsible for the incorporation of the company. However, she had an understanding that she would receive $10,000 from the creation of the company.

a) Who are the promoters of the company? (5 marks)

b) Following from the facts in Question 2, Fin is incorporated. Fin's initial directors were puppets of James. James sold a piece of land that he owned to the company for $700,000. The market value of the property was $500,000. The transaction was approved by the directors of the company without inquiry into facts or figures. After a few months, new directors were appointed, and they would like to take action against James to rescind the contract of sale of the land. Advise the directors of the company. (7 marks).

c) Following from Question 2, before the registration of the company with ASIC, Kate signed a lease agreement with Shark Ltd on behalf of the company to lease certain machinery that Fin might need once the company is incorporated. The company is registered one week after the signature of the contract, and it automatically ratifies the contract. Who is liable for the contract? (7 marks).