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In: Business and Management

Submitted By flywing
Words 255
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oPromoter is the people who establish the company:
Include people actively participating on establish company, doing passively role in establish company and establish the company using his/her own professional knowledge, and companies.

According to the case Aequitas v lefc, the promoter stands in a “fiduciary” duty when forming a company.
The promoter should avoid personal gain from the activity of forming company, and should make the principal inform of every activities of the company forming, and should disclose any profit or potential benefit conflict to the director of the company or exited or potential shareholders

Promoter can have pre-register contract with third parties, and these contracts can be ratified by the company after the company formed, company also can not ratified the pre-register contract if the promoter breach its duties, such as act for promoters’ own benefit.

When Promoter breach its duties and , 1. the company has not affirmed the contract; or 2. the parties can be restored to their original position; or 3. There has been no undue delay and no innocent party has acquired any interest in the property.
The company can get the money back and return the asset to the promoter (Erlanger v New Sombrero Phosphate Co)

Promoter also could liable for un-ture statement or non-disclosure of prospectus, any investor who rely on un-ture statement or non-disclosure of prospectus and incurred loss can get compensation from the promoter.

And if the company failed, the promoter should liable to be the liquidator as...

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