10 Importance of Promoter In Company You Must Know

Importance of Promoter In Company.In the context of business, a promoter refers to an individual or a group of individuals who take the initiative to start a business enterprise. The role of promoters is crucial in the establishment and success of a company.

10 Importance of Promoter In Company

Following are main functions of promoters.

1. To conceive, the idea of company.
2. To selects the name of company.
3. To select the suitable person who are willing to act as director of company.
4. To select the bankers of company.
5. To select the legal advisor of company.
6. To select the first auditors of company.
7. To select the suitable place of company.
8. To make the contracts with other companies.
9. To pay the all initial expenses of company.
10. To arrange for the issue of shares
11. To submit the all legal documents to registrar
12. To make the contracts with underwriter.
13. The prospectus is issued by promoters and must be filed with registrar.
14. To get the trading certificate and certificate of commencement of business.

Rights of promoter

Followings are the rights of promoters:

1. To receive the remuneration.
2. Right to receive the expenses of company.
3. Right to receive the amount from co promoters.

Liabilities of Promoters:

Following are the main liabilities of promoters:

• Promoters is responsible for all contract made by him
• Promoter is responsible for any fraud or mistake in the legal

documents.

• The personal property of promoters is responsible even alter his death.
• Promoter is responsible to disclose the secret profit earned by him.

Remuneration of promoters:

The promoters have right to get remuneration for their services. Thal may be paid in cash, shares and debentures.

1. Starting the Business: Promoters are the ones who conceptualize the idea of starting a business and take the necessary steps to turn it into a reality. They identify the business opportunity and take the risk to start the business.
2. Raising Capital: Promoters are responsible for raising capital to start the business. They use their own funds, borrow money from banks or other financial institutions, or seek investment from other individuals or organizations.
3. Creating the Business Structure: Promoters are also responsible for creating the legal structure of the company, such as selecting the type of business entity and registering the business with the appropriate regulatory bodies.
4. Building the Team: Promoters hire the initial team and provide leadership to the company. They are responsible for setting the company culture and creating a vision for the future.
5. Promoting the Business: Promoters are responsible for promoting the business and building its reputation. They use various marketing strategies to increase the visibility of the company and attract customers.
6. Strategic Decision-Making: Promoters are involved in making strategic decisions for the company, such as expanding into new markets, developing new products or services, and investing in new technologies.

In summary, promoters play a critical role in the establishment and success of a company. They provide the initial idea, raise capital, create the business structure, build the team, promote the business, and make strategic decisions. Without promoters, many successful companies would not exist today.