promoter
baswanth mohan paruchuri
(Querist) 04 June 2011
This query is : Resolved
who is promoter and what is his role before and formation of a company?
A V Vishal
(Expert) 05 June 2011
When you assume the role of a promoter in a company, whether public or private, you need to follow all the necessary steps for the formation of a company. A person who carries out all the initial steps for the incorporation of a company is known as the promoter of the company. Typically, a promoter takes care of all the essential activities that help to establish a company.
A promoter conceptualizes the idea of a company and the purpose of its formation. The promoter acquires and invests the initial capital for the company. Once all the formalities are completed, the promoter hands over the authority to the directors. A promoter can be a person or a registered company as well.
The role of a promoter is to perform many functions before he can actually start a company, and this includes:
Conceptualizing the scheme of company formation.
Finalizing the name of the company and getting it registered.
Filing the important documents, such as Memorandum and Articles of association with the Registrar.
Getting the consent of the director before finalizing the nomination.
Completing the formalities regarding the nomination of directors, secretary, etc.
Organizing the printing of Memorandum and Articles.
Handling the complete procedure for the registration of the company.
Handling the details relating to the prospectus.
Making necessary appointments of lawyers, bankers and agents.
Obtaining the co-operation of all the people who are associated with the company.
The promoter of the company is not entitled to get any remuneration for his services unless there is a legal agreement stating so. In the absence of such a contract, a promoter has no legal right to claim any compensation. However, the promoter can take his remuneration in many ways, such as he may be allotted a certain number of shares.
