Promoter And Duties And Responsibilities Of Promoters In English Company Law
Any person who does an act with reference to the formation of a company or in aid of its organization whether he has the intention to be a partners or not is a promoter. No statuory definition of promoter is given in English company law; definition is given in case law. Promoters stand in a fiduciary relation to the proposed company. Apromoter is not an agent for the company which he is forming because a company cannot have an agent before it comes into existence. The fiduciary duty is owed to the company. The fiduciary duty requires that he deal good faith; it requires that he make full disclosure of all profits he acquires on promotion; especially where the promoter sells his own property the company. Company has severel remedies for a promoterâ€™s breach of fiduciary duty. Rescission, recovery of the undisclosed profits, damages, retention of the promoterâ€™s property at its true value. Apromoter making a pre-incorporation contracts on behalf of the company will not bind the company nor can a company ratify the contract. The promoter will be personally liable on it. Apromoter has no right against the company to payment for his promotion services in the absence of an express contract with the company.
Volume (Year): 3 (2003)
Issue (Month): 2 (December)
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