Promotion of Company
Promotion is the first stage in the formation of a company. It involves conceiving a business opportunity and taking an initiative to form a company so that practical shape can be given to exploiting the available business opportunity. Thus, it begins with somebody having discovered a potential business opportunity. Any person or a group of persons or even a company may have discovered an opportunity.
If such a person or a group of persons or a company proceeds to form a company, then, they are said to be the promoters of the company.
There is no statutory definition of a promoter. A promoter is said to be the one who undertakes to form a company with reference to a given project and to set it going and who takes the necessary steps to accomplish that purpose. Thus, apart from conceiving a business opportunity the promoters analyze its prospects and bring together the men, materials, machinery, managerial abilities and financial resources and set the organization going.
After thoroughly examining the feasibility of the idea, the promoters assemble resources, prepare necessary documents, give a name and perform various other activities to get a company registered and obtain the necessary certificate enabling the company to commence business.
Thus, the promoters perform various functions to bring a company into existence.