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All the steps in the promotion stage are performed by the promoter
A promoter gives birth to a business unit and nourishes it until stands on its own feet
Types of promoters
Promoter takes the initiative of starting a business and brings are a business enterprise in existence. The persons or a group of persons, who identify a business idea and initiate the process of forming a company to give practical shape to the idea are known as promoters. A promoter gives birth to a business unit and nourishes it until stands on its own feet.
The categories of promoters 1) Professional promoter
2) Entrepreneur promoter
3) Occasional promoters
4) Financier promoters
5) Government promoters
Professional promoters are specialists and expert promoters. Promotion is their full time occupation. These promoters are interested in looking out for business opportunities and converting them into business units in return for some remuneration or commission. Professional promoters promote the company and then hand over the control and management to the board of directors.
When the owner of the business himself conceives the idea of starting a company, performs preliminary activities himself and gives a practical shape to his idea then he is known as entrepreneur promoter. The entrepreneur promoter conceived the idea of a business unit, does the ground work and becomes a part of the management when it gets established.
A person who promotes company once in a while is known as occasional promoter. It is not his regular activity. After promoting a company he goes back to his original occupation.
When the banks and other financial institutions act as promoters, they are known as financier promoters. Financiers float new companies during favourable conditions in the stock market. In India IDBI, ICICI, and many other financial institutions perform the function of a promoter.
Nowadays, the government is also acting as a promoter. Government is doing the ground work for setting up of basic and heavy industries to speed up the process of economic development in the country.