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If the promoter is the only shareholder, the company may, in compliance with the rule of the United States Securities and Exchange Commission (SEC) and similar rules in other jurisdictions, need to disclose the information prior to selling shares to the public. The fiduciary duties of promoters include:
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 is a landmark English contract law, restitution and UK company law case. It concerned rescission for misrepresentation and how the impossibility of counter restitution may be a bar to rescission.
A group of company promoters for a new hotel business entered into a contract, purportedly on behalf of the company which was not yet registered, to purchase wine. Once the company was registered, it ratified the contract. However, the wine was consumed before the money was paid, and the company unfortunately went into liquidation.
A stock promoter is a firm or person who promotes a stock, seeking to induce potential investors to buy it as part of an IPO or in the secondary market.. Stock promoters may rely on cold calling prospective investors to acquire stock in a company, as well as using the Internet, which provides for a much more efficient method of promoting a stock to a wider audience.
The corporate opportunity doctrine is the legal principle providing that directors, officers, and controlling shareholders of a corporation must not take for themselves any business opportunity that could benefit the corporation. [1] The corporate opportunity doctrine is one application of the fiduciary duty of loyalty. [2]
Corporate law (also known as company law or enterprise law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corporations, or to the theory of corporations .
If a company is unable to pay its debts as they fall due, UK insolvency law requires an administrator to attempt a rescue of the company (if the company itself has the assets to pay for this). If rescue proves impossible, a company's life ends when its assets are liquidated, distributed to creditors and the company is struck off the register.
Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals.