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ACCA Applied Skills · Corporate and Business Law (Global) · The formation and constitution of a company

Which of the following persons would most clearly be treated as a promoter of a company?

The person who takes the steps to form the company, such as arranging directors, capital and registration documents, is the promoter. Professionals who merely carry out their normal advisory work for a fee are generally not promoters, and nor are later lenders or auditors.

  1. AA solicitor who prepares the incorporation documents under instructions and is paid a professional fee
  2. BAn accountant who audits the company's first set of accounts
  3. CA person who takes the steps needed to form the company, such as arranging the directors, the capital and the registration documentsCorrect
  4. DA bank manager who lends money to the company after it is formed

Explanation

A promoter is someone who undertakes to form a company and takes the necessary steps to set it up and get it started. Professionals acting in their professional capacity, such as a solicitor or accountant, are generally not promoters. Lenders and auditors act after formation.

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