Company information

Question 1

Define promoter

Answer 1

Anyone who does anything to form or float a company

A person acting in a professional capacity (Lawyer, accountant) is not a promoter

Question 2

Duties of a promoter

Common Law
Equitable fiduciary duty

Answer 2

Common law: exercise reasonable skill and care
Equitable: (utmost good faith), disclose interest in transactions with the company to the board, shareholders. Failure to do so will allow the company t pay promoter cost price, rescind contract, sue for breach and to recover secret profits of the promoter

Omissions, errors or misleading statements in a prospectus render a promoter liable to any person who loses money on shares

Question 3

Accounting records

Retainment and shareholder rights

Answer 3

Private company must keep for 3 years, 6 for plc.

Shareholders have no right of inspection