Question

Promoters play an important role in formation of a company. - Explain. ​

Answer 1

Answer:

A promoter plays a very important role in the formation of a company. A promoter may be an individual, an association or a company. In their capacity as promoters, they perform the following functions in order to incorporate a company and to set it going. To originate the scheme for formation of the company:

• Promoters are generally the first persons who conceive the idea of business.
• They carry out the necessary investigation to find out whether the formation of a company is possible and profitable.
• Thereafter they organize the resources to convert the idea into a reality by forming a company; or in other words we can say that it is the promoter –
• who settles the name of the company thereby ascertain the name will be acceptable by the registered of the office;
• who settles the content or details as to the Articles of the companies; (here, articles implies Articles of association & Memorandum of association),
• who nominates the directors, bankers, auditors and etc.;
• who decides the place where registered office (head office) have to be situated;
• who prepare the Memorandum of Association, Prospectus and other necessary documents and file them for incorporation.

Answer 2

Answer:

Promoters play an important role in the formation of a company as they promote the products of the industry of a company which aware about the product to the people and when the people buy those products, the comp may attain profit.