Promoter
Introduction: The term 'Promoter' is said to be a business, not a legal term, usually summing up in a single word a number of business operations, familiar to the commercial world, by which a company is general brought into existence. A promoter is a person who brings about the incorporation and organization of a corporation. He brings together the persons who become interested in the enterprise, aids in procuring subscriptions, and sets in motion the machinery which leads to the formation itself. Thus the term does not have any definite meaning. Whether a person is a promoter or not depends upon the role that he plays in the business of promotion. There may be a professional promoter or the promoter of his own company like Salomon.
A person who acts in ministerial capacity is not a promoter. A solicitor, who prepares on behalf of the promoters the primary documents of the proposed company, an accountant or a valuer who helps the promotion in his professional capacity, is not a promoter. A Person who merely acts as an agent or servant of the promoters or acts on behalf of the promoter is not a promoter. However, a person employed in professional and technical capacity may also be a promoter if he participates in the formation of the Company by doing an act outside the scope of his professional duty. For example, a solicitor, valuer or accountant of the proposed Company may be a promoter if he helps in arranging the personnel for the Company. A person who helps the company in getting a purchaser of its patent, or its shares or in getting personnel for the company is a promoter.
Definition: Definition of the Promoter is given under Section 2(69) of Companies Act, 2013
"Promoter" means a person –
a) who has been named as such in a prospectus ot is identified by the company in the annual return referred to in Section 92; or b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act; Provided that noting in sub-clause (c) shall apply to a person who is acting merely in a professional capacity;

Conclusion: There is no precise definition of the term 'promoter' found in Indian Companies Act. To determine the exact legal position of a promoter is also a very difficult task. A promoter is not a trustee of the company because company has not yet come into existence. However, he is in the position similar to that of agent or trustee of the company. A promoter occupies a fiduciary position towards the company he promotes.

Author – Sumit Sanjay Ekbote