Position of a promoter in establishing a Company companies act 2013When an individual has an idea for a newbusiness venture, he or she may set about
interesting others in the venture andpersuade them to contribute capital to a company
to be incorporate for thepurpose of carrying on the venture. The individual will then be
described as‘promoter’ of the company. A person who acts in a professional capacity is nota
promoter. A company is born only when it is duly incorporated. Forincorporating a company
various documents are to be prepared and otherformalities are to be complied with.
All this work is done by promoters.
Then the question arises that who really are promoters of a company, the mostimportant
work of a promoter is in the formation of a company. The whole processof the formation of
a company may be divided into four stages
(iii) Floatation and
(iv) Commencement of business.Promotion is a term of wide import denoting the preliminary steps taken for thepurpose of registration and floatation of the company. A promoter may be anindividual, syndicate, association, partner or company.