Duties and functions of Promoters:
The main duties and functions of a promoter is to undertake to form a Company with reference to agreement for the project. He has to handle all legal formalities for formation of a Company.
Promoters may have three possible positions:
1. He may be a promoter to acquire the property for the company in which case, all the rules of agency would apply. Accordingly, any profit he may make will belong to the company.
2. He may acquire the property himself and then decide to form a Company and sell the property to it in which case no question of agency or trusteeship arises. He can make what bargain he chooses without being under any obligation to disclose the profits.
3. He may acquire the property with a view to resell it to the Company which he intends to promote, in which case he becomes bound by the fiduciary obligation and if he makes a profit he must disclose it to the Company.
Duties and functions of Directors:
1. Distribution of work: among the staff;
2. Every director must act honestly and in the interest of the Company;
3. A Director must exercise such degree of skill and diligence as would amount to the reasonable care.
4. A Director should perform his duties at a greater degree of skill.
5. A Director should attend the Board or other meetings and should act according to the decision of the meeting.
6. To hold the AGM.
7. To maintain proper books of accounts.
8. Recommendation of dividend.
9. Disclosure of information as required by the Act and as required by others Act, rules, regulations and regulatory authorities.
Duties and functions of Auditor:
The main duty of an Auditor of a Company is to express an independent opinion on the financial statements prepared by the company. The auditor should conduct the Audit in accordance with BSA to obtain a reasonable assurance about whether the financial statements are free from all material misstatements. The auditor shall inquire into the following.
a) Whether loans and advances made by the company on the basis of security which have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members.
b) Whether transactions of the company which arc represented merely as book-entries are prejudicial to the interests of the company.
c) Where the company is not an investment company or a banking company, whether so much of the assets of the company as consist of shares, debentures and other securities, have been sold at a price less than its purchased price by the company.
d) Whether personal expenses have been charged to revenue account.
e) Whether it is stated in the books and paper of the company that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment and if no cash has actually been so received, whether the position as stated in the accounts, books and the balance sheet is correct, regular and not misleading.
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