Promoter

Promoter:

A promoter is a person who does the necessary preliminary work incidental to the formation of a company. It is a compendious term used for a person who undertakes does not and goes through all the necessary and incedintial primiliries an incorporated of a company.

Functions of promoter:

The promoter of a company decides its name and ascertaines that it will be accepted by the register of companies.he settles the details of the company memorandum and articles.

Legal status for the promoter:

As to the axact legal status of a promoter. The statutory provisions are silentin most part, except for a couple of sections in the specific relif his legal status is incapable of presice statement.

Fiduciary position of a promoter:

A promoter stands in a fiduciary relation to the company which he promoters.the fiduciary position of a promoter may be summed up as followes:

1.not to make any profit at the expense of the company.

2.to give benefit of negotiations to the company.

3.to make a full disclousure of intrest or profit.

4.not to make unfair use of position.



Duty of promoter as prospectus:

The promoter must see, in connection with the prospectus, if any is issued that the prospectus.

1.contains the necessary particulars.

2.does not contain any untrue or misleading statements or does not omit any material fact.

Remuneration of promoters:

A promoter has no right to get compensation from the company for his services in promoting the company unless there is a contract,he is not entiteled to get any compensation in respect of any payment made by him in connection with formation of a company.