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The promoter of a company generally performs the following important functions in relation to the promotion of the company: –
- Obtaining the certificate for starting the business of the company.
- Organization of capital and other means for the purpose of setting up the company.
- Coverage of preliminary expenses.
- Arrange for the issuance of capital.
- Selection of capable, competent and experienced persons for the appointment of directors.
- Have the company incorporated and obtain the necessary certificate.
- If the company is to be formed by buying an already existing business, then to have a correspondence and settle the contract with the sellers of the property.
- Arrange the preliminary agreement with the underwriter, the seller of the property and the management agent, etc.
- Determine the name, place of business, scope and objectives of the company.
- Make arrangements for bankers, auditors, brokers and legal advisers, etc.
- Prepare the main lines of Memorandum and the Articles of Association of the company.
- Prepare the Company’s Prospectus and send it to the Registrar, and manage its advertising.
- The promoter must not derive any secret profit from the promotion of the company.
- The promoter must fully disclose all facts relevant to the business, including his/her interests and profits. According to Section 26 of the Companies Act 2013, the promoter’s profit must be disclosed in the prospectus itself.