What are the duties of the promoter?
Responsibilities
- Demonstrate and provide information on promoted products/services.
- Create a positive image and lead consumers to use it.
- Use lectures, films, charts, and/or slide shows.
- Distribute product samples, brochures, flyers etc.
- Identify interest and understand customer needs and requirements.
Who are promoters and what is pre-incorporation contracts?
The promoter is obligated to bring the company in the legal existence and to ensure its successful running,; and in order to accomplish his obligation he may enter into some contract on behalf of prospective company. These types of contract are called ‘Pre-incorporation Contract’.
Is a promoter liable on pre-incorporation contracts?
The promoter remains personally liable for pre-incorporation contracts he enters into, even after corporate adoption, unless and until there has been a novation.
Who can be held as a promoter?
In USA, the Securities Exchange Commission Rule 405(a) defines promoter as a person who, acting alone or in conjunction with other persons directly or indirectly takes the initiative in founding or organizing the business enterprise.
What is pre incorporation contract?
Pre incorporation contracts are those contracts that are necessary to run a business or incorporation. When promoters make pre-incorporation contracts, the company is just an artificial entity which means at that time, the company does not exist. So basically, it cannot be executed at the time of incorporation.
What is pre incorporation?
Definition of preincorporation : existing or occurring before the formation of a corporation the preincorporation period/process preincorporation expenses a preincorporation contract.
Can a company be sued on pre incorporation contract?
The company cannot sue or be sued on a pre-incorporation contract. However, persons who conclude contracts for the unborn company can be held personally liable on such contracts.
What are the consequences of pre-incorporation contract?
Before a company is incorporated, it has no legal existence. Accordingly, it has no capacity to enter into a contract. The company cannot sue or be sued on a pre-incorporation contract. However, persons who conclude contracts for the unborn company can be held personally liable on such contracts.
Can a company upon successful incorporation adopt a pre-incorporation contract made for its benefit?
But the necessary condition is that the contract should be warranted by the terms of its incorporation. This provision clearly negates the common law doctrine [12] which says that the company cannot ratify or adopt the pre-incorporation contract [13] .