Promoter Promoter is a person who is involved in the formation of the company.

He is not thr agent of the company as the company has not come into existence. The promoters should not make a secret profit from the company. He can make a profit IRO any transaction with the company ONLY if he makes a full and fair disclosure of such profit to the BOD. If the company becomes aware of the secret profit made by the promoters after entering into the contract, the company can Cancel such contract and recover the secret profit made by the company. The company can also sue the promoters for breach of contract.

Promoters right to remuneration Promoters do not have any right to remuneration or recover any expenses incurred IRO incorporation of the company. Even if the AOA provide for payment of remuneration or reimbursement of expenses, it is not binding on the company. Remuneration to the promoters can be paid in any of the followings ways. Issue shares at discount Paying lumpsum remuneration Paying commission to promoters on purchase of any property purchased by the company. Payment of commission to promoters on shares sold by the company.

 There must be a an association of persons interested in forming a company. Minimum 2 members are required to make a private company and 7 for a public company The AOP should have a common object The object should be lawful The requirements of the companys act should be fulfilled. Application in form no 1A should be made to the ROC to check the avaliability of the proposed name. On obtaining approval of name, the following documents should be filed with the ROC. MOA and AOA statutory declaration that all the legal formalities have been complied with aggrement for appointing MD,wholetime director or manager

consent form IRO directors holdiong qualifying shares On incorporaton,the address of the registered office of the company should be intimated to the ROC within 30 days Name , address , occupation of directors,manager and secretary should be submitted to the ROC The ROC shall examine the total documents and if he is satisfied,he shall issue the certificate of incorporaton(COI) The COI issued is conclusive evidence that all the legal requiremants have been complied with.

On incorporation, the company becomes a body corporate with a name in whoch it shall carry on business. It acquires a legal recognition ad comes into existence COI IS CONCLUSIVE EVIDENCE The term conclusive evidence means that no inquiry shall be made regarding the corectness/incorrectness of the COI and it canoot be challenged in any court of law

PRE-INCORPORATION CONTRACTS These are comntracts that are entered by the promoters on behalf of the proposed company . ADOPTION OF PRE-INCORPORATION CONTRACTS As per sec. 15 & 19 of the specific relief act, IRO pre-incorporation contracts, if the company adopts such a contract, abinding contract arises between the company and the third party.the promoters are then not personally liable.