Who are promoters of the company.Discuss there role and the realationship with the company.Assignment?
Answers
When an individual has an idea for a new business venture, he or she may set about interesting others in the venture and persuade them to contribute capital to a company to be incorporate for the purpose of carrying on the venture. The individual will then be described as ‘promoter’ of the company. In the 19th century, when industrial revolution came and companies flourished, the concept of promoter gained substantial importance like no other occupation, as there were no restrictions on advertising immediately to the public, inviting them to take shares in new companies, some promoters took advantage of their position and of public sympathy and hence defrauded the public on large extent. The role of promoter in establishing a company changed substantially in the 20th century.When, in later years people refused to buy shares in newly incorporated companies, because of their established gullible image and hence hesitated to invest in companies which had no trading history and so disreputable company promoter statured to vanish. With the evolution of stock exchange and the role of susceptible promoters gone, what eventually happened was the profusion of promoters around the globe to start over a company and enhance theirs and other associates economic conditions enhance? Judging for theirhistorical role, it’s clear that,Company promoters play an indispensable role in the formation of a company. A company is born only when it is duly incorporated. For incorporating a company various documents are to be prepared and other formalities are to be complied with. All this work is done by promoters. Gerstenberg has defined promotion as the discovery of businessopportunities and the subsequent, organization of fun and property and managerialability into a business concern for the purpose of making profits therefrom. After the idea is conceived, what promoter does is to make detailed investigations to find out the weaknesses and strong points of the idea, determine the amount of capital required and estimate the operating expenses and probable income. On being satisfied about the economic viability of the idea, the promoters take all the necessary steps for incorporating the company and start changing people’s lives.
Promoters: Who Are They?
When we speak of promoters and their role in company’s establishment, it becomes important to discuss about the company’s entire process of formation. The company’s formation can be divided into four segments. First, is calledPromotion. Second is registration. Third is Floatation and fourth is Commencement of business. Promotion symbolizes preliminary steps taken for the purpose of registration and floatation of the company. The person who undertakes these phases are called promoters. A Company may have more than one promoter.