Under the Companies Act, 2013, what term does the Act use for the persons who form a company by putting their names to its memorandum at incorporation?
Question and options
Under the Companies Act, 2013, what term does the Act use for the persons who form a company by putting their names to its memorandum at incorporation?
Promoters
First directors
Incorporators
Subscribers
Answer and explanation
Section 3(1) of the Companies Act, 2013 speaks of a company being formed by persons 'subscribing' to the memorandum, and section 2(55) treats these subscribers as having agreed to become members. Promoters, defined in section 2(69), need not sign the memorandum at all. Subscribers who are individuals may become the first directors under section 152(1) if the articles name none, but that is a later consequence, not the term for those who sign.
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