Question

As a promoter is in a fiduciary relationship with the unformed company, he is never permitted to make a profit out of the companys promotion. Statement is true of false.

• A. True
• B. False
• C. It depends on his own wish
• D. None of the above

Answer 1

The correct option is A True

True

The promoter stands in a fiduciary relationship to the corporation and its investors, as well as any co-promoters. Promoters have a fiduciary duty to act in good faith and with utmost honesty, and they must always put the interests of the corporation and its shareholders above their own interests.