2.13 - Promoters Flashcards
(8 cards)
What are promoters?
People responsible for setting up and registering a company
What makes being a promoter dangerous?
They can be sued before the companies even come to life
Promoters are often also…
The first directors of the registered company
How does the law define a promoter?
Not as an agent, but a fiduciary - should be able to bind company when it doesn’t exist yet
What do promoters owe?
Duty of good faith and integrity
What are promoters required to disclose?
Any personal interest - failure to disclose makes contract voidable
Do pre-incorporation contracts stand?
If you try to get out of them by claiming the company doesn’t exist, the contract will stand
When will a pre-contract made by a promoter not stand?
If the promoter makes the contract under the company’s name
