Asked by Lizbeth RamosPerdomo on May 17, 2024
Verified
All of the following are true of promoters of a corporation EXCEPT:
A) They solicit investors to begin the corporation.
B) They prepare the formal documents of incorporation.
C) They may make contracts in the name of the corporation.
D) They continue to solicit capital whenever needed after incorporation.
Promoters of a Corporation
Individuals or entities involved in the creation and organization of a corporation, including raising capital and completing legal formalities before registration.
Formal Documents
Official papers that follow a specific format or standard, often used for legal, official, or ceremonial purposes.
Solicit Capital
The act of requesting funding or investment from individuals or organizations, typically for business operations or projects.
- Identify the duties and accountability of promoters and directors during the establishment and administration of a corporation.
Verified Answer
PD
Pamyrjtha DesronvilMay 18, 2024
Final Answer :
D
Explanation :
Promoters of a corporation are primarily involved in the initial stages of setting up the corporation, including soliciting investors and preparing incorporation documents. Their role typically diminishes after the corporation has been established, and it is not their ongoing responsibility to continue soliciting capital whenever needed after incorporation. This task is generally taken over by the corporation's management and board of directors.
Learning Objectives
- Identify the duties and accountability of promoters and directors during the establishment and administration of a corporation.