(Duties of Promoters)
(1) Maintaining trust relationship – The promoter also has a trusting relationship with the future members of the company, which is necessary to be maintained, he should not do any act of breach of trust.
(2) To act as a trustee – The promoter has to act like a trustee and work only for the benefit of the company.
(3) Disclosure of truth – The promoter must disclose all the truthful facts of the company.
(4) Information not to be kept secret – No information regarding the operation of the company should be kept secret. Keeping information confidential is misrepresentation. Similarly, if an incomplete explanation had taken place, it would be called a disbelief.
(5) Non-disclosure of earned profit – Non-disclosure of earned profit is illegal and prohibited. According to the decision of Loman v. Salomon & Co., profit earned on the basis of prior disclosure is valid.