Management

Liability of promoters, directors and agents, in relation to companies limited by shares



Liability of Promoters, Directors and Agents, In Relation to Companies Limited by Shares

Introduction

A Company, which stands to, be limited by shares tends to segregate its share capital with the shares of predetermined amounts. However, this allows the companies limited by shares to than issue it to its stakeholders. In this way, share holders tend to run the company instead of any individual, this form of structure today tends to be considered most viable option amongst the investors and shareholders. Therefore, in the recent past such companies have seen a tremendous increase in its numbers. If the working, of such companies are to be analyzed in depth the fact surfaces quite swiftly that, in such a company the liability of its members tends to be directly proportional to the amount of shares procured by them.

For such companies, it is essential to associate itself with the term limited (Ltd) in order to highlight the fact that the liability of its members stands to be limited. However, it is important to keep the perspective in view that such companies' stands to be financed through loans which can either be secured or unsecured or thorough grants. The act of financing such companies through equity stands to be considered a viable option by many experts (Baxt 1995, pp.394). In the context of this paper, the liability regarding promoters, directors and agents tends to be discussed in relation to the company which stands to be limited by shares.

Discussion

Liability of Promoters

Many experts tend to believe that a promoter is as vital to any company limited by its shares as a director to the movie. In case of a company which stands limited through shares the definition of the promoter tends to change accordingly. In such a company, a promoter is a person who tends to lay the foundation for the precluding work. Based on which a company or organization for that matter tends to be organized. Both have the ability to drive their respective movies or companies. However, in the context of this paper a promoter is liable to a contract until and unless the other party decides to part ways and tends to inculcate any other promoter to do the vital work. A company which tends to be limited by shares, a promoter serving that the company stands bound to take the responsibility of all the debts and losses only during the organizational period. If such a company, fails to lock in all the registrations for an event that the promoter stands liable to for the repayment to the subscribers. Other than the primary liability of the promoters in such a scenario the secondary liability of the promoters is to remain liable to any given contract and does not qualify to be relieved if later the corporation tends to be established and indulges in the practice of adopting the guarantor (David & Nicholas 2008,pp.195).

This also means that the promoter shall remain liable ...