PROMOTER
“Promoter” means a person—
(a) Who has been named as such in a prospectus or is identified by the company
in the annual return referred to in section 92; or
(b) Who has control over the affairs of the company, directly or indirectly
whether as a shareholder, director or otherwise; or
(c) In accordance with whose advice, directions or instructions the Board of
Directors of the company is accustomed to act:
Provided that nothing in sub-clause (c) shall apply to a person who is acting
merely in a professional capacity
FUNCTIONS OF A PROMOTER
Professional promoters
There are firms which specialise in company promotion, including its
incorporation and flotation, before handing it over to the shareholders or their
representatives for the company.
Occasional promoters
These promoters take interest in floating some companies. They are not engaged
in promotion work on a regular basis. They take up the promotion of some
company and once it is over they go to their original profession. For instance,
engineers, lawyers etc. may float some companies.
Entrepreneur promoters:They are both promoters and entrepreneurs. They conceive the idea of a new
business unit, do the groundwork to establish it and may subsequently become a
part of the management.
Financier promoter
Some financial institutions, like investment banks or industrial banks, may take
up the promotion of a company with a view to finding opportunities for
investment.
