Fiduciary Duties Of Company Promoters: A Critical Analysis Of Their Scope And Enforcement In Modern Corporate Structures

Full Text Link

V S Meera, Alliance University, Bengaluru

ABSTRACT

Fiduciary obligations of promoters are very essential in understanding the Indian Corporate Law. Starting from the creation of the identity of a company the role of promoters continues even after the incorporation. The position of the promoters is very related to the ideas of honesty, fairness, and disclosure. From the very traditional approach of considering a promoter as an individual who promotes the business, we have come a very long way. As the corporate governance grows with advancements of Companies, this research tries to understand the dynamic character of promoters. The importance of due diligence from the side of promoters is analyzed with a comparative approach. The presence of various institutional oversight mechanisms and their role in regulating promoters aligns with this demand. There must be an alignment which balances corporate accountability and business innovations. The present corporate matrix has made it complex to understand. The presence of various layered subsidiaries and cross-holdings mixed difficult to find the real promoter. With the emergence of digital economy, share holdings has become more cross border and promoters has become international. Even when India has multiple Institutions to regulate promoters, enforcement of many rules is still a dream. The overlapping of duties and contradictory regulations makes the situation words. The duties of the promoters are not completely legal and there is a great ethical angle for the same. We must see promoters as not the developers of a business but the real protector of investor confidence. They are the strongest bridge that connects the investors fortune with the bright future of a company. That is primarily why transparency and fairness is always attached to the duties of promoters. With clear regulations, both promoters and the company will benefit together.

Keywords: Fiduciary obligations, Corporate governance, Due diligence, Corporate accountability, Investor confidence.

235. FIDUCIARY DUTIES OF COMPANY PROMOTERS- A CRITICAL ANALYSIS OF THEIR SCOPE AND ENFORCE

Download FIDUCIARY DUTIES OF COMPANY PROMOTERS- A CRITICAL ANALYSIS OF THEIR SCOPE AND ENFORCE • 274KB