Promoters

In this lesson

1. 0:00 Formation and constitution of a company
2. 0:37 Understanding promoters and their role
3. 1:25 Fiduciary duties of promoters explained
4. 2:04 Avoiding conflicts of interest and disclosure
5. 3:35 Remedies for breach of fiduciary duty
6. 4:06 Pre-incorporation contracts and liability
7. 5:29 Solutions to pre-incorporation contract problems
8. 6:54 Modern company registration process

About this lesson

A promoter is anyone who takes the necessary steps to form a company, and this role comes with significant legal responsibility. As a promoter, you must act in utmost good faith, which means avoiding conflicts of interest, disclosing any personal interests in company transactions, and never making secret profits from your position. If you breach these fiduciary duties, the company can rescind contracts, claim damages, or recover any secret profit you've made. One of the trickiest areas you'll encounter is pre-incorporation contracts. Since a company doesn't legally exist until it's registered, any contracts you enter into before incorporation can leave you personally liable. The lesson covers practical solutions: delaying contracts until registration is complete, using indemnity agreements to protect yourself, purchasing an off-the-shelf company that's already incorporated, or arranging novation to replace pre-incorporation contracts with new ones once the company exists. Understanding these principles protects both you and your clients when you're helping them establish a business. You'll see how modern digitalisation has made company registration faster and easier, reducing the need to rush into problematic pre-incorporation contracts.

Duration: 8m