The term promoter has not been defined anywhere under the Companies Act, 1956. The Act only states that a promoter of the company shall also be liable for any misstatement in the prospectus.
Promoter need not necessarily be associated with the initial formation of the company; one who subsequently helps to arrange floating of its capital will equally be regarded as promoter.
In conclusion it may be said that word, "Promoters" is used in common parlance to denote any individual syndicate, association, partnership or a company which takes all the necessary steps to create and mold a company and set it going.
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