The expression ‘promoter’ has not been defined under the Companies Act, 1956, although the term is used expressly in sections 62, 69, 76, 478 and 519. The erstwhile Companies Act, 1956 ('CA 1956') contained no statement of statutory duties of directors, and acts of directors were usually reviewed in the context of their powers in terms of section 291 of the CA 1956 (which dealt with general powers of the board) and other applicable laws, and their established roles under common law as laid down in several judicial precedents 1. WhatsApp. Though the term Promoter finds its place in the company law, it has not been defined anywhere under the Companies Act, 1956 (Act). False. Telegram. Companies incorporated under CA 2013 shall be required to comply with this provision within 6 (six) months from date of incorporation. But certain fiduciary duties, like an agent, have been imposed on him under the Companies Act. February 25, 2015 by Rajat Sharma 35 Comments. Print. 27. There are many classes of Directors under Companies Act, 2013 like (Executive, Non-executive, Independent Director, and Nominee Director etc etc). Let’s take a look at the composition of the board of directors companies Act, 2013. (1) In this Act, unless the context otherwise requires – “accounts” means annual financial statements; It is, however, interesting to note that so far as the legal position is concerned, he is neither an agent nor a trustee of the proposed company. Twitter. Linkedin. Section 2(34) of the Companies Act, 2013 defines a director.. Presented by: Mr. Pavan Kumar Vijay E: pkvijay@indiacp.com M: 9810032568 Corporate Professionals D-28, South Extn., Part – I New Delhi 110049 ROLE OF DIRECTORS UNDER COMPANIES ACT – 2013 2. • Promoter is a person who brings about the incorporation and organisation of a corporation. Promotion is a term of wide import denoting the preliminary steps taken for the purpose of registration and floatation of the company. The legal obligations of a promoter are as under: (i) To exercise due care and intelligence in the work of promotion. They are as follows: Sr. No. 5 April 2013 6:29 AM GMT. Under Sections 5(1) and 7(1) of 2013 Act, it is not compulsory for every company to have its own articles. Legal Position of Promoters: A promoter is neither a trustee nor an agent of the company which he promotes because there is no trust or principal in existence at the time of his efforts. I believe that there are 2 reasons for this. Section 62 of the Companies Act, 1956 defies the expression ‘promoter’ for a limited purpose of that section only . False. The performance of JCRL is as under : 1. (ii) To act without deceit, misfeasance or breach of trust towards the company. Kanhayalal Bhargava.The position of a director has been cited by Bowen LJ in the case of Imperial Hydropathic Hotel Co Blackpool v. Legal position of Promoter in a Company: The promoters inhibit a key position and have extensive powers relating to the formation of a company. This Act may be cited as the Companies Act, 2011, and shall come into operation on such a date as the Minister may, by notice published in the Gazette, appoint. The Companies Act, 2013 (hereinafter referred to as “The Act”) has ushered in a number of innovative changes as compared to its predecessor Act and one such novel feature relates to the mandatory appointment of “key Managerial Personnel”(KMPs) in the case of certain classes of companies. Promoters are severally and jointly liable for any untrue statement given in the prospectus and for the secret profits. Facebook. Among many of the subject matter under Companies Act, 2013, one of the most heated and topic of endless discussion is “Promoters”. Furthermore, the proposed company is prevented from selecting names if the proposed name is the name of a company that has been dissolved within the preceding five years of the intended registration. Interpretation 2. As under the old Companies Act 1963, the new Companies Act 2019, Act 992 gives the Registrar the power to refuse or deny registration of a company name if said name is misleading or undesirable. It must be noted that the director actually works in different capacities at different times to ensure that the company is run in a legal and an efficient manner. POSITION OF A PROMOTER IN COMPANIES ACT, 2013. By Legal Era. False, it is 3. In case of companies incorporated under CA 1956, companies are required to comply with the provision within a period of 1 (one) year from the commencement of the act. Index Definition Positions Held by Director Changing Role and State of Directors Decision Making Duties of Director Power of Director … When it comes about Indian Turf, the expression ‘promoter’ has not been defined under the Companies Act, although the term is used expressly in sections 62, 69, 76, 478 and 519. Provisos in Companies Act, 2013 In the nature of Exception: Definition of Promoter – Provided further that nothing in sub clause (c ) shall apply to a person who is acting merely in a professional capacity. Email. Doctrine Of Indoor Management Under The Indian Company Law . Regulations, 2011, the term ‘Promoter’ is also includes member of promoter group. (iii) To disclose full details of the nature and extent of money taken by him in the process of promotion. Promoter. This has, in part, been achieved by revising the requirements relating to constitution of the board of directors, inter alia, through ‘independent directors’ and enhancement of the roles and responsibilities of directors. This is because the term does not have any legal connotation but contains a business element. Promoter. They are not trustees because a company can never be a beneficiary. (b) A company incurs greater expenses at formation, throughout its life and on dissolution, though these need not be excessive. Ltd.v. In this Editorial author shall discuss the provisions of ‘Executive & Non – Executive Director’. Generally, any person who plays a major part in forming a company or establishing its business (usually the prospective owners or directors of the company). Section 2(69) of Companies Act 2013, deals with the term Promoter: 1. Therefore it acquires citizenship. 2. 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