Promotion, Business Law and Ethics

Promotion:

A company comes into existence from the moment of its registration by the registrar of companies. However, the  registration is preceded by what is called "promotion". The promotion consists in taking the necessary steps to incorporate the company and ensuring that it has sufficient capital to  commence its operations.

Promoters

  There is no general statutory or judicial definition of the word "promoter". This is so because the Lawmakers in  England as well as the English judges were of the view that a comprehensive definition of the word would be limiting, and might prevent the court from catching "the next ingenious rogue" who might be brought to the court to account for his actions as promoter. Kenya has adopted the applicable English law.

English judges have however described the word 'promoter' in varying terminology of which the following may be quoted:

(a)   A promoter is "one who undertakes to form a company  with reference to a given project a and to set it going and who takes the necessary steps to accomplish that purpose" (per Cockburn, J): Twycross v Grant.

(b)   "The term 'promoter' is a term not of law, but of business, usefully summing up in a single word a number of business operations familiar to the commercial world by which a company is generally brought into existence",(per Bowen, J): Whaley Bridge Calico Printing Co v Green.

It should be noted that s.45(5) of the Companies Act does not contain a general definition of 'promoter'. It merely defines the word for purposes of sub-section  (1) of section 45 by excluding from the category of promoters persons who give professional services in  connection with the formation of the company. 

The answer to the question "who is a 'promoter' must therefore depend on the facts of a particular case.

Posted Date: 1/12/2013 2:14:50 AM | Location : United States







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