## Promoter — Section 2(69)

### Statutory Definition

A promoter means a person who satisfies any of the following:

1. Named as such in a prospectus, OR is identified by the company in the annual return under Section 92;

2. Has control over the affairs of the company, directly or indirectly, whether as a shareholder, director or otherwise; OR

3. In accordance with whose advice, directions or instructions the Board of the company is accustomed to act.

> Exception: A person acting merely in a professional capacity (e.g., CA, advocate, solicitor giving advice) is NOT a promoter.

### General (Conceptual) Meaning

A person who initiates promotion of a company.
One who undertakes to form a company w.r.t. a given project and takes necessary steps to set it going.
Need not necessarily be associated with the initial formation — one who subsequently arranges floating of capital is equally a promoter.
May be an individual, association, partnership or company that takes steps to incorporate and set the company going — in a fiduciary position.

### Key Takeaways

Aspect	Position
Position w.r.t. company	Fiduciary
Timing of involvement	Can be at initial formation OR subsequent capital floatation
Forms	Individual / Firm / Association / Company
Professional advisor (CA/Advocate)	NOT a promoter

Worked example

### Example 1

Example: Reliance Industries Ltd. (RIL) currently has approximately 46 shareholders who are classified as promoters or part of the promoter group — illustrating that 'promoter' is not restricted to a single founding individual but can include a wider promoter group identified in the company's annual return.

### Example 2

Example: Mr. A advises the Board of XYZ Ltd. as its legal counsel in formal opinions. Mr. B, a shareholder, regularly issues directions to the Board which the Board habitually follows. — Mr. A is NOT a promoter (acting in professional capacity). Mr. B IS a promoter under Sec 2(69)(c).

⚠️ Common exam mistakes

Treating professionals (CAs, lawyers, solicitors) as promoters merely because they advise the company — they are excluded if acting solely in professional capacity.
Believing a promoter must be involved only at the inception — a person arranging capital floatation later also qualifies.
Forgetting that a promoter can be a body corporate or partnership, not only an individual.
Missing the fiduciary nature of a promoter's relationship with the company.

Bare-Act text Section 2(69) · Companies Act, 2013 · click to expand

Promoter [Sec 2(69)] means a person — (a) who has been named as such in a prospectus or is identified by company in annual return u/s 92, (b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or (c) in accordance with whose advice, directions or instructions the Board of the company is accustomed to act (except where such person is acting merely in professional capacity).

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