2.2 Promoters: Meaning, Position, Duties, Rights, Responsibilities

Meaning: those who take the initiative in forming the company — name it, prepare the MOA/ AOA, arrange capital and the first contracts. Position: neither trustee nor agent in the full sense — a fiduciary toward the company in formation (the classical formula: standing in a fiduciary relation to the future company). Duties: to disclose all interests (profits made in promotion, property bought and resold to the company); no secret profit; to act with good faith toward the venture and the first members. Rights: to be reimbursed the pre-incorporation expenses (as the company may adopt); the remuneration agreed in a disclosed arrangement. Responsibilities/liabilities: personal liability for pre-incorporation contracts (2.3); liability to account for secret profits; the prospectus's misstatement liabilities where they issue it. The case fuses two doctrines: the authority of corporate organs (only acts within conferred power bind) and the ultra viires discipline (2.8) — the company's and its organs' powers are bounded by the constitution and the law.