Question

Those persons who take initiative in the formation of a joint stock company are called _____________.

• A. promoters
• B. investors
• C. shareholders
• D. All of above
  

Answer 1

The correct option is A promoters

• “A promoter is the one, who undertakes to form a company with reference to a given object and sets it going and takes the necessary steps to accomplish that purpose.” —Justice C.J. Cokburn
  
• Promoter conceives the idea for setting-up a business entity at a given place and takes care of various formalities required for establishing a company. Promoter may be a individual, firm, association of persons or a company. Individuals who assist the promoter include professionals like Counsels, Solicitors, Accountants etc., however they are not regarded as promoters.