Promoters
I. Definition
i. A person who conceives the idea of forming the company and takes
necessary steps to complete the formalities of incorporation and registration
and also makes arrangement for capital or assets with which company is to
be started is called the Promoter of Company.

– Section 2 [69]
ii. Promoter is a person by the efforts of whom a company is organised.
– Browen L. J.,

II. Function of Promoter
i. Conceiving the Idea of the Company.
ii. Investigation and verification of the idea.
iii. Assembling the requirements
iv. Making preliminary contracts
v. Financial planning
vi. Compliance of legal formalities
vii. Getting the company incorporated
viii. Ensuring subscription to the initial capital
ix. Ensuring verification of registered office
x. Controlling affairs of the company
xi. Advising and giving directions
xii. Appointing directors if all directors resign.
III. Duties of Promoter
i. To disclose all material facts
ii. Not to make secret profit
iii. To disclose the interest in the transaction
iv. Not to sell own property without informing
v. To make full disclosure of the property bought
vi. Not to make unfair use of his position
vii. Not to accept appointment as independent director
viii. To provide opportunity to exit from securities if objects are changed.
ix. To provide opportunity to exit from securities in case of variation in terms
of contract or objects
x. To attend before the tribunal.
IV. Liabilities of promoters
i. Liability for furnishing false information for incorporation
ii. Liability for misleading prospectus