Question

Essay Type Question.
Who is promoter? Explain the role played by him in the promotion?

Answer 1

A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.

Promoters generally owe a duty of utmost good faith, so as to not mislead any potential investors, and disclose all material facts about the company's business.

Apart from conceiving a business opportunity the promoters analyse its prospects and brings together the men, materials, machinery, managerial abilities and financial resources and set the organisation going. After thoroughly examining the feasibility of the idea, the promoters assemble resources, prepare necessary documents, give a name and perform various other activities to get a company registered and obtain the necessary certificate enabling the company to commence business.