DIFFERENCES BETWEEN

PROMOTERS AND
MANAGEMENT
BY
AKSHAYA A
SIDDHARTH H POPAT

PROMOTER
A promoter conceives an idea for setting-up a

particular business and performs various

formalities required for starting a company.
A promoter may be a individual, firm,
association of persons or a company.
Definition:
A promoter is the one, who undertakes to
form a company with reference to a given
object and sets it going and takes the
necessary steps to accomplish that purpose.

CHARACTERISTICS OF A
PROMOTER
1. A promoter conceives an idea for the settingup a business.
2. He makes preliminary investigations and
ensures about the future prospects of the
business.
3. He brings together various persons who
agree to associate with him.
4. He prepares various documents and gets the
company incorporated.
5. He raises the required finances.

LEGAL POSITION OF PROMOTER

The company law has not given any legal

status to promoters. A promoter is neither an

agent nor a trustee of the company because it
is a non entity before incorporation
The promoter moulds and creates the
company and under his supervision it comes
into existence.
It is the duty of the promoter to get
maximum benefits for the company.

MANAGEMENT
Managementinbusinessesandorganization

sis the function that coordinates the efforts of

people to accomplish goals and objectivesby
using available resources efficiently and
effectively.
In profitable organizations, management's

primary function is the satisfaction of a range

ofstakeholders.

MANAGEMENT
Management consists of sixfunctions:
forecasting
planning
organizing
commanding
coordinating
controlling

MANAGEMENT LEVELS
Top

The top consists of theboard of directors,

president, vice-president,CEOsand other
executives.
Middle
Consist ofgeneral managers, branch
managers and department managers.
Lower
Consist ofsupervisors, section leaders,
foremen, etc.

DIFFERENCES BETWEEN PROMOTERS

AND THE MANAGEMENT/ FOUNDER
In business, a founder is basically someone who

has founded the company.

The founders or the management come up with
the idea about what the company and business
should be.
The management is responsible for coming up
with a business model as well as acquiring human
and other required resources.
After the company is set up, the founder can run
it and act as the companys CEO or Chairman, as
well as sit on the companys Board of Directors.

A promoter, is someone who promotes the

business. It is the promoters responsibility to

get people to invest money into a corporation.
The role of a promoter is often fulfilled by an
investment banker, an underwriter, or a stock
promoter.
In order to raise money for the companys initial
investment, the promoter usually charges a fee.
The promoter can also be paid in company stock
or free entrance into the investment activity as
compensation for their work.
The role of a promoter may also be fulfilled by
the founder himself.