Entrepreneurship

Development
BBA- IVth Semester
 Promotion of a Venture
Meaning (What do you understand/mean by promotion of a Venture?)
Promotion of a venture means conceiving an idea about the
establishment of a business enterprise and finding out the business
opportunities and translate ideas into reality.

Definition
Promotion of a venture means discovery of business opportunities and
organising and planning of funds, property and managerial ability for
the establishment of a business enterprise.
 Promotion of a Venture
• Promotion of a Venture is considered from two view points.

From the view point of incorporation or establishment

• Emphasis is given on the nature of business to be transacted by the
venture and the formalities required for its incorporation

From the view point of its expansion or growth.

• Emphasis is given on the process of growth and the strategies used
by entrepreneur.
 Promoter
• Promoter is a person or persons who take/takes the initiative to setup
a new business and to procure necessary funds from different sources
through motivation and inspiration
• An entrepreneur is a promoter of the business
 Types of Promoters
Promoters

Professional Occasional
Promoters Promoters
Promoters who are engaged in setting up of Promoters who take initiatives to set up a new
corporate ventures. They are either individuals business if required.
or institutions. Some individuals having some
special qualifications are engaged as
professional promoters
 Functions of Promoters
• To conceive an idea of forming a company and explore its possibilities.
• To conduct the necessary negotiation for the purchase of business in
case it is intended to purchase as existing business. In this context, the
help of experts may be taken, if considered necessary.
• To collect the requisite number of persons (i.e. seven in case of a
public company and two in case of a private company) who can sign
the ‘Memorandum of Association’ and ‘Articles of Association’ of the
company and also agree to act as the first directors of the company.
 Functions of Promoters
• To decide about the following:
(i) The name of the Company,
(ii) The location of its registered office,
(iii) The amount and form of its share capital,
(iv) The brokers or underwriters for capital issue, if necessary,
(v) The bankers,
(vi) The auditors,
(vii) The legal advisers.
 Functions of Promoters
• To get the Memorandum of Association (M/A) and Articles of
Association (A/A) drafted and printed.
• To make preliminary contracts with vendors, underwriters, etc.
• To make arrangement for the preparation of prospectus, its filing,
advertisement and issue of capital.
• To arrange for the registration of company and obtain the certificate
of incorporation.
• To defray preliminary expenses.
• To arrange the minimum subscription.
 Duties of the Promoter
To disclose the financial details

To disclose all the material facts

The promoter must make good to the company what he has obtained as a
trustee

Duty to disclose private arrangements

Duty of promoter against the future allottees

 Liabilities of Promoter
Liability to account in profit

Liability for mis-statement in the prospectus

Personal liability

Liability at the time of winding up of the compan