Market (or Primary) Stakeholders - usually internal stakeholders, are those that engage in economic transactions with the business. (For example stockholders, customers, suppliers, creditors, and employees) Non-Market (or Secondary) Stakeholders - usually external stakeholders, are those who - although they do not engage in direct economic exchange with the business - are affected by or can affect its actions. (For example the general public, communities, activist groups, business support groups, and the media)

A corporate promoter
A corporate promoter (also "projector") is a person who solicits people to invest money into a corporation, usually when it is being formed. An investment banker, an underwriter, or a stock promoter may, wholly or in part, perform the role of a promoter. Promoters general owe a duty of utmost good faith, so as to not mislead any potential investors, and disclose all material facts about the company's business.


The first step towards the formation of a company starts with efforts of its promoters. This nomenclature has its own significant importance. It occurs frequently in the Companies Act, 1956, but the irony is that this word has not been defined by the act. Section 62(6)(a) of the act describes the nature of the promoter as one who was a party to the preparation of the prospectus or of a portion thereof containing an untrue statement, but does not include any person by reason of his acting in a professional capacity in procuring the formation of a company. In the United States, Securities Exchange Commission Rule 405(a) defines a promoter as a person who, acting alone or in conjunction with another person, directly or indirectly takes the initiative in founding or organizing the business enterprise. Duties of promoters The Companies Act contains no provision which states the duties of the promoters, but cultural notions and legal trends have enumerated certain duties: Initiator The promoter originates the scheme for the formation of a company, he gets memoranda and articles prepared, executed and registered and he deals with merchant bankers, brokers and legal advisors. Fiduciary agent Promoters stand as a fiduciary agent of a company. As a fiduciary agent, the following duties are done in his name: (i) He should make all disclosures regarding accounts and formation so as to maintain transparency at the time of transfer of management to the director. (ii) He should not make any secret profit out of the promotion of the company. (iii) He should make all disclosures regarding transactions entered by him on behalf of the company as promoter. Liabilities of promoters Section 56 and Schedule II. These sections require that the promoter state all the contents of a prospectus, such as general information; capital structure of the company; terms and conditions of the present issue; company management and its projects; and financial information such as reports of editors, accountants, and the underwriting commission brokerage. The liability of the promoter arises only with respect to original allotments of shares and would not extend to any further allottees. Civil Liabilities (Section 62). Civil liability arises when any person applies for the shares and debentures on the faith of the prospectus, believing it to be true, and later finds untrue statements and records regarding the public issue of the company. Every such person may rescind the contract to take the shares and claim damages. Criminal liabilities (Section 63). Criminal liability arises like civil liability. Every promoter authorizing the issue is punishable by imprisonment for a term up to two years, a fine up to Rs50,000 (US$1,200) or both. Section 203. If any promoter is found to be involved in a activity which amounts to an offence regarding the promotion, management or formation of a company, the court can bar such a promoter from taking part in administration of the company for five years.

the issuer of the bond is the borrower (debtor).[4] and financial assets. a financial product commonly offered to consumers in the United States by banks.Section 478... in the course of the winding up of a company. it appears that any business of the company has been carried on with the intent to defraud creditors. Amortization (or amortisation) is the process of decreasing. Section 542. If any promoter enters into any contract on behalf of the company before it was actually incorporated. It is negotiable because the ownership of the certificate can be transferred in the secondary market. assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset). they are lenders). It is money and other valuables belonging to an individual or business. or accounting for. .. in the case of government bonds. or maturity.[2] Thus a bond is like a loan or IOU: the holder of the bond is the lender (creditor). but the major difference between the two is that (capital) stockholders have an equity stake in the company (i. sometimes monthly). which is aperpetuity (i. after which the bond is redeemed. Simply stated. and credit unions. bond with no maturity). Bonds provide the borrower with external funds to finance long-term investments. BOND In finance. A bond is a formal contract to repay borrowed money with interest at fixed intervals (semi annual. Pre-incorporation contracts. in which the authorized issuer owes the holders a debt and. is obliged to pay interest (the coupon) to use and/or to repay the principal at a later date. to finance current expenditure. Certificates of deposit (CDs) or commercial paper are considered to be money market instruments and not bonds. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. termed maturity.e. trademarks.e. [1] The balance sheet of a firm records the monetary[2] value of the assets owned by the firm.[3] Current assets include inventory. whereas stocks may be outstanding indefinitely. and the coupon is the interest. the court may declare that any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally liable. then the promoter shall be personally liable for non-fulfillment of the contract unless it was rectified by the company after incorporation. or.[4] Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. thrift institutions. Tangible assets contain various subclasses.[1] Two major asset classes are tangible assets and intangible assets. If. bonds and stocks.e. depending on the terms of the bond. Examples of intangible assets are goodwill. ASSET In financial accounting. Amortization Amortization is generally known as depreciation of intangible assets of a firm. whereas bondholders have a creditor stake in the company (i. A certificate of deposit (CD) is a time deposit. annual. a bond is a negotiable certificate that acknowledges the indebtedness of the bond issuer to the holder. An exception is a consol bond. an amount over a period. copyrights.[1] It is a debt security. including such items as accounts receivable. Loan amortization refers to spreading payments over a period of time. while fixed assets include such items as buildings and equipment. Another difference is that bonds usually have a defined term. including current assets and fixed assets. patents and computer programs. The court can order a promoter liable to public examination when he is found to have been involved in fraudulent activity at the time of promotion of the company. assets are economic resources. Bonds and stocks are both securities. they are owners).

In exchange for keeping the money on deposit for the agreed-on term. For example. and carries higher interest repayment rates than bonds. the higher the interest rate the [1] issuing institution must pay. payroll). such as remote coal towns. An underwriter works closely with the issuing body to determine the offering price of the securities. and "points" on some websites. six months. Since it is not backed by collateral. Fixed rates are common. or other indices are introduced. arcade tokens and tickets. interest rates were expected to rise. These allow for a single readjustment of the interest rate. at a time of the consumer's choosing. or occupied countries in war time. the longer the maturity on a note. ships on long voyages. only firms with excellent credit ratingsfrom a recognized rating agency will be able to sell their commercial paper at a reasonable price. military bases. CDs that are indexed to the stock market. Commercial paper is a money-marketsecurity issued (sold) by large corporations to get money to meet short term debt obligations (for example. many banks and credit unions began to offer CDs with a "bump-up" feature. fixed term (often monthly. they are "money in the bank". Sometimes. a fixedinterest rate. during the term of the CD. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable. International financial reporting standards(ifrs) Scrip Scrip is a term for any substitute for currency which is not legal tender and is often a form of credit. commercial paper is an unsecured promissory note with a fixed maturity of 1 to 364 days. COMMERCIAL PAPER In the global money market. CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions.CERTIICATE OF DEPOSITS CDs are similar to savings accounts in that they are insured and thus virtually riskfree. Typically. or one to five years). at which time the money may be withdrawn together with the accrued interest. They are different fromsavings accounts in that the CD has a specific. IOUs. usually. but are typically lower than banks' rates. It is intended that the CD be held until maturity. Commercial paper is usually sold at a discount from face value. Definition of 'Underwriter' A company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. Interest rates fluctuate with market conditions. institutions usually grant higher interest rates than they do on accounts from which money may be withdrawn on demand. the bond market. but some institutions offer CDs with various forms of variable rates. three months. and. Other forms of scrip include subway tokens. . buys them from the issuer and sells them to investors via the underwriter's distribution network. and is only backed by an issuing bank or corporation's promise to pay the face amount on the maturity date specified on the note. in mid-2004. although this may not be the case in an inverted yield curve situation.