definition of promoter

[RISHI]

A Promoter in Company refers to the person who has been named in the Prospectus of the company or is identified by the company in its Annual Return. Does it mean that company can identify/declare any person as promoter in annual return. If a company is incorporated in 1965 and promoters named in prospectus are all died now.  Now it is being run by 4-5 persons who are relatives to each other. Can we declare all these persons as promoters as per definition of promoter? I think we can declare. plz clarify.

[CS V Kartik]

There also other factors to be seen in it. A person may neither be a director or shareholder. But if he has a direct or an indirect influence in decision making powers pertaining to functioning the company, he too will be a promoter. Even the direct relative of a promoter who at a later date joins the company will also be a promoter. So, if in your case if they are direct relatives to the persons named in the prospectus or have a direct influence in the decision making powers, they can be named as promoters.

Kartik

On Sun, Oct 16, 2022, 11:40 AM RISHI <rmit...@gmail.com> wrote:

A Promoter in Company refers to the person who has been named in the Prospectus of the company or is identified by the company in its Annual Return. Does it mean that company can identify/declare any person as promoter in annual return. If a company is incorporated in 1965 and promoters named in prospectus are all died now.  Now it is being run by 4-5 persons who are relatives to each other. Can we declare all these persons as promoters as per definition of promoter? I think we can declare. plz clarify.

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[RISHI]

Thanks Mr Kartik.  But I refer to only clause 69(a) only i.e. a person  (a) who has been named as such in a prospectus or is identified by the company in
the annual return referred to in section 92; 

We all now that in case of a private company, no prospectus is issued so as per definition, all those persons who are declared as promoters in annual return are promoters. Generally we take promoters all those persons who are named as shareholders/directors in moa. But suppose the company is further sold and entire management is changed, then how to identify promoters of company.   

I discuss one more case of a private limited company where there are 3 persons (non relatives) are directors  of a company and each of them hold 33 % share capital of the company with their family members. Then nobody has individual control over affairs of the company, how to determine who are promoters. In this case also assume that company was initially held by some other persons and present directors have purchased this company i..e there is not written their names in moa/aoa/prospectus.

[CS A Rengarajan]

you can also name person as a promoter in annual return

regrds

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A. Rengarajan

Practising Company Secretary

Rengarajan& Associates

( Formerly Arub & Associates)

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