0
A promoter is not an agent for the company which he is forming, because a company cannot have an agent before it comes into existence. Further more, he is not a trustee for the company because there is no company yet in existence. The promoter stands in fiduciary relation to a company and to those persons becomes shareholder later, the promoter is accountable to the company like an agent and trustee.
He cannot make any secret profit. He must disclose everything to the company. He is personally liable for all contract made by him with third party on behalf of company.
Before incorporation a company has no legal existence and so cannot make a contract. A promoter, therefore, has no legal right to claim remuneration for his services. If the promoter enters into a contract with the company about his remuneration, after the incorporation of company, then directors are liable to pay remuneration.
The remuneration may be paid in any of these ways. If a commission on business or property taken over by the company through him. A company may give him a lump sum amount in cash. Some shares can be allotted to him. He may take a commission at a fixed rate on shares sold. He may take an option to subscribe for certain non-issued shares of company at par within a fixed period.
Wiki User
∙ 12y ago
Wiki User
∙ 10y agoAs with all things "company" business, the rights as you say should be stipulated in a contract, agreement, corporate policy, position duties and responsibilities document. Unless the rights are negotiated.
Add your answer:
Earn +20 pts
How many promoters are required to start a company?
minimum of two promoters should be there in a company
Why is goodwill account debited when company issues shares to promoters?
Promoters are the pioneer investors of a company. It can be said that due to the promoters the company has come this far. So, promoters do deserve some credibility and they get goodwill. Goodwill is debited and the promoters capital is credited. Thus, the promoters don't bring in cash for their increased share. But if, the goodwill has already been created before and the promoters have got their share, promoters need to bring cash for additional share.
Religare Enterprises is led by promoters of which company?
Ranbaxy
Can promoters be called the agents or trustee of the company?
Yes Why Not
What about the company wealth line promoters pvt ltd?
iam investment
Who receives ipo money?
The promoters of the company that is going public through the IPO
Who is owner of tcs?
The TATAs are the promoters and the public including the TATAs are the owners as it is a public limited company.
Promoters are what?
What are the scientific word promoters?
Is contributed capital a financing or investing activity?
It is certainly a financing activity to the business or company. Just like debentures taken or any other source of financing. it is in a way money owed by the business to the promoters or shareholders to finance the company's activities. however, to the shareholders or promoters of a business it is an investing activity
What are promoters of a company?
The formation of a company is a lengthy process. It involves several stages. The first stage in the process of formation is promotion. At this stage, the idea of carrying on a business is conceived by a person or by a group of persons called promoters. For incorporating a company various formalities are required to be carried out. The promoters perform these functions and bring the company into existence. 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. Get Link: Norwayoffice.biz
What is the definition of Promoters in India?
In India, a promoterÊis defined as the one who undertakes to form a company. This person is the one who takes the necessary steps to accomplish that purpose of the company's project.Ê
What is promoters contribution?
In an IPO, the promoters must contribute at least twenty percent (20%) of the postissue capital. The term promoter includes: 1. person(s) in overall control of the company; 2. person(s) who are instrumental in the formulation of a plan or program pursuant to which the securities are offered to the public; and 3. persons named in the prospectus as promoters. Any person acting as a director or officer of the issuer company merely in a professional capacity is not included in the definition of promoter.
