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Essay example - Company law for accounts. A promoter of a company. Pre-incorporation contracts. Change of company name.
Finance & Accounting
Pages 9 (2259 words)
A promoter of a company has many duties including disclosure of any profits made during the promotion of the company. This means that one must not make any secret profit without disclosing it if he a promoter. …
Extract of sample
This is mean to protect shareholders from exploitation by promoters. In case a promoter makes a profit secretly, the company may commence a legal action for rescission or recovery of the profits made secretly. This promoter is assumed to have executed without outmost good faith. This means that disclosure of their activities is the most important issue and they must work within the objectives of the promoters and must use their skills knowledge for the best of the firm (Siddharthacadey, 2010).
A promoter is any person involved in the planning to incorporate, or initiate a running of a company, other than persons involved in a purely professional capacity. A promoter need not necessarily be the main person behind the incorporation, but he must have some executive function. The stereotype of a company and sells his business to it is a promoter.
A promoter has a fiduciary duty to the company he is forming and this requires him to disclose all profits he makes during the promotion of the company. ...
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