Who is a promoter?
A promoter is a person who stands in a fiduciary relationship to a company and takes necessary steps such as raising capital, arranging for directors of the company, placing of shares and negotiating preliminary agreements in order to form a company and set it going. A person can be a promoter after a company is incorporated.
A promoter is not entitled to the recovery of any money or sum spent during the formation of the company including registration fees, capital fees or any preliminary expenses except there is a valid agreement that expressly states the remuneration of the promoter and recovery of money spent. In fact in practice, promoters get paid. A promoter may or may not be a director of the company.
FUNCTIONS OF A PROMOTER
- To explore the possibilities of forming a company
- To conduct the preliminary negotiations
- To bring together the shareholders/subscribers of the MEMART and arrange directors
- To assist or decide the structure, name, location and other important parts of the company
- To ensure the registration of the company with the corporate affairs commission e.t.c
- To aid the floating off of the company’s capital
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