Promoter Of A Corporation in United States

Practical Information

Note: Some of this information was last updated in 1982

A person who undertakes to form a new corporation (in U.S. law) , to procure for it the rights and money by which it is to carry out the purposes set forth in its certificate (in U.S. law) of Incorporation, and to establish it for the prosecution of its business.

A promoter occupies a fiduciary (in U.S. law) relationship, or a relationship of trust and confidence toward the corporation that he or she promotes. The utmost good faith is required in the promoter’s dealings with it. The promoter also occupies a position of trust and confidence toward the persons induced to subscribe for shares to be issued by the corporation. Ordinarily a promoter’s activities are over when the corporation is fully formed that is, when the real stockholders in interest have elected a permanent and independent board of directors (in U.S. law) that undertakes the management of the corporation.

(Revised by Ann De Vries)

What is Promoter Of A Corporation?

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