... placing the capital is a promoter." Determination of promoter is a question of fact in each case as it comes. A promoter must take initiatives for the formation of a company. However, persons acting under contractual or professional capacity (solicitor, accountant, and engineer) are not promoters. * Legal status of Promoters: They occupy an important place and have wide powers in formation of a company. But it is interesting that a promoter is neither an agent (as he has no principles) nor a trustee (as there no trust exists) of the proposed company. He holds a fiduciary relationship with the company. This relationship imposes an obligation on the promoters to disclose fully all the material facts relating to the formation of the company. Moreover, his dealings with the company must be open and fair. * Function of the promoters:> To originate idea of starting a business and forming a company.> To investigate ...

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