Times Biz

The term ‘promoter’ means an individual, firm or institution which undertakes to form a company with reference to a given object and sets it going and takes the necessary steps to accomplish that purpose.  It is not a terms of law but of business.  Tata, Birla, Ambani are well-known promoters in India.
The role of promoters may be described as follows:

• Discovery of Business Opportunities: Promoters identify the opportunities which could be undertaken as business concerns.  They carry out a preliminary study of the market to judge whether a new product or service will sell.  They also consult experts in the field for this purpose.

• Detailed Investigation: Promoters conduct detailed examination to judge the prospects and profitability of business proposals.  They analyze the probable cost of production, nature of competition in the market, availability of required technology and raw materials,. Expected sales volume, amount of refit expected, etc.

• Assembling Resources: Promoters take steps to ensure the availability of necessary capital, materials, machinery, personnel, etc.  They enter into contracts with brokers, underwriters, bankers, etc.

• Canvassing: Promoters approach the appropriate persons and persuade them to join in the formation of the company.

• Launching the Enterprise: Promoters take steps to get the Oman incorporated.  They set the necessary documents prepared a filed so that the company is formed and can commence business operations

A promoter is neither an agent nor a trustee of the company set by him.  He is not an agent of the company because a non existent principal (company before its incorporation) cannot have an agent.  Therefore, a promoted is personally liable for the preliminary contracts if they are not ratified by the company after incorporation. Though a promoter is not a trustee, he must observe good faith in the promotion of the company.  He must nutmeat any secret profits out of his dealings.  In case there are nay profits on the purchase of machinery and other assets for the company, he must disclose them to the company.

Social responsibility means the intelligent and objective concern for he well being of society.  It restrains behavior form ultimately destructive activities, no matter, however profitable in the immediate future.  It leads towards betterment of humanity.

The liability of a minor partner is limited to the amount of capital invested by him n the firm. After attaining the age of 18 years, the minor must inform the ulcer whether he will continue in the firm as a partner or not.  If he keeps quiet, he will be assumed to continue as a partner and his liability will become unlimited.

The term Business reeds to production, purchase, sale an exchange of goods and services on a regular basis with the aim of earning profits by satisfying by human wants. It includes all industrial and commercial activities such as mining, manufacturing, trading, transportation, warehousing, banking insurance and others.  Business is an economic activity.

Profit is an important objective of business and it plays a vital role in business in the f profit is the source of income and provides the mean soft livelihood for the businessmen and their families Profit provides funds for the growth of business  Profit serves as an index of the efficiency and performance of business  Profit is a reward for risk bearing Profit increases the reputation or goodwill of a business firm.

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