0 like 0 dislike
asked in Corporate Law by

1 Answer

0 like 0 dislike
answered by

A corporate promoter (otherwise called "projector") is a man who requests individuals to put cash into a partnership, more often than not when it is being framed. A venture broker, a guarantor, or a stock promoter may, entirely or to some extent, play out the part of a promoter. Promoters general owe an obligation of most extreme great confidence, in order to not deceive any potential speculators, and unveil every single material certainty about the organization's business. It is likewise said that Promoter is a man who does the preparatory work coincidental to the arrangement of organization.

Definition of ‘promoter’: 

A promoter is a founder of a company who takes the entrepreneurial initiatives in founding a company.  

It is notable that There is no statutory definition of a promoter in company law, and the courts have not given a comprehensive judicial definition.  

Case Law:
In the case of Twycross v Grant (1877) Cockburn CJ defined a promoter as: “One who undertakes to form a
company with reference to a given project and to set it going, and who takes the necessary steps to accomplish
that purpose.

In Whaley Bridge Calico Priniting Co v Green (1880) Bowen LJ described the term promoter as ‘ a term not of law but of business, usefully summing up in a single word a number of business operations, familiar to the commercial world, by which a company is generally brought in to existence. 

The consequence of the above statements is that the answer to the question of whether a person is a promoter or not is a question of fact, not of law, and the promoter will be a person who exercises some control over the affairs of the company both before and after the company is formed, until the process of formation is completed. 

In each case it is a question of fact whether a person is a promoter or not? It point to be noted that the Companies Ordinance 1984 does not give any definition of the word: ‘promoter’.  

Welcome to LegalVersity.com Q & A, where you can ask questions and receive answers from other members of the community.