Promoter Liability

Cite this article as:"Promoter Liability," in The Business Professor, updated October 17, 2014, last accessed October 20, 2020, https://thebusinessprofessor.com/lesson/promoter-liability/.
Video Thumbnail

Promoter Liability

http://youtu.be/M7aabpd1bSw   Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP What is promoter liability? A promoter of a corporation is the individual arranging contracts for or on behalf of the corporation. This includes entering into subscription agreements for the sale of

 

Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP

What is promoter liability?

A promoter of a corporation is the individual arranging contracts for or on behalf of the corporation. This includes entering into subscription agreements for the sale of securities to shareholders. The promoter is liable for these contracts until or unless the corporation ratifies and adopts the promoter’s activity. In such case, the corporation agrees to hold the promoter harmless for any potential liability from her actions as promoter.

Was this article helpful?