Fiduciary relation of promoters definition

What does Fiduciary relation of promoters mean?

A promoter has a fiduciary relation with the company he promotes from the time he first promotes until he ceases to promote.

A promoter is in a fiduciary position in relation to the company he promotes from the initial time when he becomes a promoter until he is no longer a promoter. The promoter's relation to the company, however, is not that of trustee and beneficiary, or agent and principal. Although a promoter may acquire assets as a trustee for a company, in the situation where the plans to sell the assets to the company at a profit, the presumption is that in relation to those assets he is not a trustee in the ordinary sense, but may, as a vendor or agent to the vendors, make a profit on the sale to the company, even if he is also its sole director or one of its directors, provided that he makes full disclosure to the company. The burden, however, is on the promoter to show that he has made full disclosure.

Fiduciary relation of promoters is referenced 1 in Halsbury's Laws of England

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