Asked by Kaylee Rabon on Jul 09, 2024
Verified
A promoter owes a fiduciary duty to the corporation and to its prospective investors.This implies that:
A) a promoter is an agent of the prospective corporation.
B) prospective investors in the business can control actions of a promoter.
C) a promoter may engage in intrinsically fair transactions with the corporation.
D) a promoter is an agent of the prospective investors in the business.
Fiduciary Duty
A legal obligation of one party to act in the best interest of another. The fiduciary relationship is noteworthy for involving a trust and confidence between the fiduciary and the principal.
Prospective Investors
Individuals or entities that are considering the possibility of investing in a particular opportunity but have not yet committed.
Promoter
An individual or company responsible for organizing or founding a new enterprise, especially by raising capital, securing partnerships, and navigating legal requirements.
- Understand the role and legal obligations of promoters in corporate formation.
Verified Answer
AP
Asutosh PanigrahiJul 15, 2024
Final Answer :
C
Explanation :
A promoter owes a fiduciary duty to the corporation and to its prospective investors.This implies that a promoter may engage in intrinsically fair transactions with the corporation.
Learning Objectives
- Understand the role and legal obligations of promoters in corporate formation.