PROMOTER

WHO IS A PROMOTER
PERSON WHO CONCEIVE THE IDEA
OF THE COMPANY & TRANSLATE IT
INTO A WORKING REALITY.
PROMOTER IS A PERSON WHO
ASSEMBLES THE MEN MONEY &
MATERIAL INTO A GOING CONCERN.

FUNCTIONS
Planning the formation
Considering prestart problems
Selecting first directors & fulfilling obligations
complying them.
Selecting name ,& defining companys activity &
capital.
Selecting the bankers
Preparing prospectus , articles
Getting the certificate of incorporation.
Meeting initial expenses
Issuing shares debentures , getting minimum
subscription
Getting certificate of commencement.

Legal position of promoter

Fiduciary relationship
Trust & confidence
Conditions
Not to make any secret Profit
Not to earn profits on personal assets.
To give benefit of negotiations to the company
Not to make unfair use of position
Duty as to prospectus

Remuneration to promoters

cash
Option to purchase shares
Partly in cash , partly in shares & debentures
Commission

Pre-incorporation/preliminary contracts
Contracts entered into by the promoter before
the incorporation.
Company not bound by pre incorporation
contracts
Company cannot enforce pre incorporation
contract
Promoters personally liable
Ratification of a pre-incorporation contract
Specific performance of pre-incorporation
contract.