What is the role of a promoter in a company?

What is the role of a promoter in a company?

A promoter is someone, who has been connected with the business from the start. He can also be referred to as the starter of a business or the founder. He is responsible for raising capital from various sources and entering into the first agreements for the start of a business and incorporation of a company.

Who is a promoter of a company example?

Examples of such promoters in company law include engineer, architect, lawyers, etc. Financial promoters: Some financial companies may take up the work of financial promotion of a company depending on the situation of the market.

What do you mean by promoters?

A promoter conceives an idea for setting-up a particular business at a given place and performs various formalities required for starting a company. A promoter may be a individual, firm, association of persons or a company.

Do promoters of a company get paid?

Promoters are paid in company stock, or they receive a percentage of the capital raised.

How many promoters can a company have?

1. If there is more than one promoter in a company then the promoter can claim against another promoter for the damages and compensation paid by him. 2. If any untrue statement is given in the prospectus and for the secret profits then the promoters will be held liable severally and jointly as well.

Who can be a promoter?

Definition of Company Promoter

  • A person who has been named as such in a prospectus or is identified by the company in the annual return in section 92; or.
  • A person who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or.

What are the duties and liabilities of a company promoter?

The duties of promoters are as follows:

  • To disclose the secret profit: The promoter should not make any secret profit.
  • To disclose all the material facts:
  • The promoter must make good to the company what he has obtained as a trustee:
  • Duty to disclose private arrangements:
  • Duty of promoter against the future allottees:

    What is an example of a promoter?

    CHEMISTRY GLOSSARY Promoter is any component added to a catalyst to increase activity or selectivity. Examples are tin added to platinum reforming catalysts to improve selectivity to coke formation and chloride added to isomerization catalysts to increase activity.

    What are the types of promoters?

    Types of promoters

    • Occasional promoters.
    • Entrepreneur promoters.
    • Financial promoters.
    • Discovery of a business idea.
    • Detailed investigation.
    • Assembling the factors of production.
    • Entering into preliminary contracts.
    • Naming a company.

      Can a company run without a promoter?

      However, there is a lot of big and popular company in India where the promoters hold zero percentage. Yes, these companies have zero stakes with no promoter and are owned or managed by professionals. Today, we take a look at the top Companies with Zero Promoter Holding in India. Keep reading.

      What are the rights of promoters?


      • Right of indemnity. When there is more than one person as a promoter of the company then one promoter can claim compensation or damages paid by him against the other.
      • Right to receive legitimate expenses.
      • Right to receive remuneration.

      Can a promoter be a company?

      A promoter may perhaps be an individual, a firm, and an association of persons or a company. Occasional promoters are those whose most important interest is the floating of companies. They are not in promotion work on standard basis but take up promotion of some companies and then go to their former profession.

      What does it mean to be a promoter?

      A Promoter is a person who is engaged in promoting the formation and incorporation of the Company. He conceives the idea of setting up the business and took the steps for the formation of the Company. However, the persons who assist in the incorporation of the company are the Professionals and not the promoters.

      How does a corporate promoter make a profit?

      Secret profit is made by entering into a transaction on their own behalf and then selling the concerned property to the company at a profit, without disclosing the profit to the company or its members. Promoters can make profits in dealings with the company, provided they discloses these profits to the company and its members.

      Who is the occasional promoter of a company?

      Occasional promoters are that person who undertakes to form a company occasionally and take the forming or floating of a company as their part time job. The person who makes all investigating, preparation and arrangements for incorporating a company are called promoters.

      Who are the promoters of a company in India?

      These are the persons who specialise in promotion of companies. They hand over the companies to shareholders when the business starts. In India, there is lack of professional promoters. In many other countries, professional promoters have played an important role and helped the business community to a great extent.

      Who are the promoters of a corporation?

      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. An investment banker, an underwriter, or a stock promoter may,…

      What is the role of a promoter?

      The promoter is responsible for the solicitation and allocation of funds to be used by the company. Should the company require a new board member, the promoter is responsible for locating, interviewing and ensuring the new board member’s suitability to the company.

      What happens at a promoter?

      In genetics, a promoter is a region of DNA that leads to initiation of transcription of a particular gene. Promoters are located near the transcription start sites of genes, upstream on the DNA (towards the 5′ region of the sense strand).

      Who/what is a promoter of a company?