Briefly explain the position of a promoter of a company

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formsofbusiness

#1

Briefly explain the position of a promoter of a company.
Or
Why are promoter neither the agents nor the trustess of a company ?


#2

The promoters are neither the agents nor the trustee of a company:
(a) They can’t be the agents as the company is yet to be incorporated so it can’t appoint him as an agent.
(b) They can’t be the trustee of the company as the wealth or property which they are investing to run the business are not owned in company’s name. Therefore, promoters enjoy a fudiciary position and are personally liable for all the contracts entered by them for the company before its incorporation.