To explain as a law professor- “if the board of directors and the management of the company acts as per someone’s directions or orders, for whatever reasons, then that person is a promoter. Promoter Group means an immediate relative of the Promoter (i.e. Position of promoters in Companies Act, 2013. (i) Sub-section (68) of section 2: Registrar of Companies may register those Memorandum and Articles of Association received till 11.9.2013 as per the definition clause of the ‘private company’ under the Companies Act, 1956 without referring to the definition of ‘private company’ under the “said Act”. In the nature of Explanation: Definitions of Private and Public Company. The term has been used specifically in Section 35, 39, 40, 300 and 317 of the Act. The ‘promoter’ has been defined in Section 62, 69, 76, 478 and 519 of the Companies Act, 1956. The expression ‘promoter’ has not been defined under the Companies Act, 1956, although the term is used expressly in sections 62, 69, 76, 478 and 519. 1.3.3 Definition of Promoter in Companies Act, 2013 Recently in the Companies Act 2013 the term was defined in section 2(69) in following way: “Promoter” means a person— (a) who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or Section 62 of Companies Act, 1956 defines ‘promoter’ for the limited purpose of that section only. The term ‘promoter’ has been defined under section 2(69) of the Companies Act, 2013. POSITION OF A PROMOTER IN COMPANIES ACT, 2013. Definition. As per this section it refers to a person-a) Who has been named as such in the prospectus or is identified by the company in the annual return; The concept of promoters is explained in the Indian Companies Act, 2013. In the Old Act, the subscribers to the M.o.A was regarded as the promoters since they had subscribed to … According to this clause, a promoter is a person whose name has officially been assigned as the receiver of annual returns of the company and mentioned in the prospectus. The best way to examine a promoter, both under companies act and as per the ICDR is by focusing on clause (b) and (c) of the definition above. The ICDR Regulations require that promoters be clearly identified in the draft red herring prospectus. The definition of promoters is incorporated in the definition clause of the Companies Act, 2013. Before 2013 there was no legal position defined in the Old Version of the Act of 1956. Section 2 (69) describes the meaning of a promoter. spouse of that person, or any parent, brother, sister or child of the person or of the spouse); persons whose shareholding is aggregated for the purpose of disclosing in the offer document “shareholding of the promoter group”. Companies Act, 2013. IPOs are an important exit route for private equity (PE) investors in India and are governed by the Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and the Companies Act, 2013. A promoter doesn’t have any right against the company for his remuneration unless there is a contract to that effect. Provisos in Companies Act, 2013 In the nature of Exception: Definition of Promoter – Provided further that nothing in sub clause (c ) shall apply to a person who is acting merely in a professional capacity. The definition of the phrase “promoter” has been defined in Section 2 (69) of Companies Act, 2013. In Twycross v. Listed below are three possible scenarios in which a discussion on the definition of 'promoter' becomes relevant, along with key considerations for PE investors while negotiating special rights in a Company. 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