Company law
This query is : Resolved
Ajay Mishra
(Expert)
26 August 2013
Hi
The term ‘Promoter’ is common in the corporate sector and also common parlance. However it is to be noted that the term ‘Promoter’ has not been defined under the Companies Act, 1956 (Act) and other legislations relating to corporate affairs. It is also to be noted that although the term is used under various provisions of the Act, Section 2 dealing with definitions has not defined the term. Section 62 of the Act dealing with civil liability for misstatements in the prospectus has defined the expression ‘Promoter’ under sub-section (6) to mean a party to the preparation of the prospects or any portion thereof. It can therefore be presumed that any person named as Promoter in the prospectus would by default and in terms of the aforementioned sub section be deemed the Promoter of the company.
Notwithstanding the definition in the sub-section (6) of Section 62, it must be borne in mind that the definition is restrictive and is meant for purposes of prospectus only. In such a scenario the term ‘Promoter’ remains undefined in so far as the companies that do not seek public shareholding and especially as relating to private limited companies.
The term ‘Promoter’ is common in the corporate sector and also common parlance. However it is to be noted that the term ‘Promoter’ has not been defined under the Companies Act, 1956 (Act) and other legislations relating to corporate affairs. It is also to be noted that although the term is used under various provisions of the Act, Section 2 dealing with definitions has not defined the term. Section 62 of the Act dealing with civil liability for misstatements in the prospectus has defined the expression ‘Promoter’ under sub-section (6) to mean a party to the preparation of the prospects or any portion thereof. It can therefore be presumed that any person named as Promoter in the prospectus would by default and in terms of the aforementioned sub section be deemed the Promoter of the company.
Notwithstanding the definition in the sub-section (6) of Section 62, it must be borne in mind that the definition is restrictive and is meant for purposes of prospectus only. In such a scenario the term ‘Promoter’ remains undefined in so far as the companies that do not seek public shareholding and especially as relating to private limited companies.
27 August 2013
before incorporation of company,promoter made many contract with others.after incorporation .Does company accept those
contracts?
contracts?
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