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GLOSSARY
Disclosure by promoters definition
Published by a LexisNexis Corporate expert
What does Disclosure by promoters mean?
In order to retain profits made by the promoter or defeat a claim for rescission or damages, the promoter must make a full disclosure to the company of his interest in the transaction, the nature of his interest and all other material facts relevant to the transaction.
Although it is not yet established whether the exact amount of profit need be disclosed, in the application of a trading certificate without which a public company cannot do business or exercise any borrowing powers, the company is obliged to specify any amount or benefit paid or given (or intended to be paid or given) to any promoter of the company, and the consideration for the payment or benefit. Disclosure may be made by the articles of association of the company, or by communication to such shareholders of the company as become such by applying for shares on the footing of a prospectus or an offer for sale which makes due disclosure, or by communication to a board of directors of the company which is independent of
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