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PROMOTION is the process of exploring, investigation, planning, and organisation of resources with the purpose of setting up a business enterprise. It refers to a series of business activities by which a business enterprise is brought into existence.

According to C.W.GERSTENBERG, promotion is the discovery of business opportunities and the subsequent organisation of funds property and managerial ability into a business concern for the purpose of making profits therefrom. Promotion begins when a promoter discovers a idea regarding some business ends up with the launching of an enterprise as a going concern.

A promoter is the one who conceives the idea of a business enterprise. He analyzes its prospects and works out a tentative scheme of organisation . He brings together men , materials, machines , money and managerial abillity and floats the enterprise .

A promoter is a business man  , who gives birth to the company after securing knowledge of the business world . A promoter may be an individual, a firm, an association or even a company engaged in the formation of the company. That means whosoever performs the functions of a promoter is known as the promoter .


1, IDENTIFICATION OF BUSINESS IDEA OR OPPORTUNITY: The first stage in the promotion of a company is the discovery of a new idea or prospection. It is the promoter who conceives an idea of starting a business for making a profit. With his experience, the promoter discovers the field of gainful investment. His knowledge enables him to judge the soundness in exploiting an invention for business purpose. His experience and judgement enable him to see clearly whether the invention has commercial possibilities or not.T hus the promoter is an explorer of untraversed fields.

2.FEASIBILITY STUDY or DETAILED INVESTIGATION: The second stage in the promotion of a company is a detailed investigation. This is done to find out whether the business which he likes to start will be profitable or not. For this purpose, he takes up the help of experts like engineers, accountants, cost accountants, market research specialists. This will enable him to know the probable cost of the production, the probable demand and supply of the product. If the reports are favourable, he will proceed further with his business idea.

There are 3 kinds  of feasibility studies :

1.Technical feasibility:  Sometimes the idea may be good but technically impossible because of not availability of technology or raw materials.

2.Financial feasibility: The promoters should identify the financial requirements at the beginning of the project.

3.Economic feasibility: Sometimes, the project is technically and financially viable, but may not be profitable.

3. COMPANY’S NAME APPROVAL: Having decided to form the company, the promoters have to select a name for it and submit, an application to the registrar of companies for the state in which the registered office of the company is to be situated, for its approval. The proposed name may be approved if it is not considered undesirable. It may happen that another company exists with the same name or a very resembling name or the preferred name is misleading to say to suggest that the company is in a particular business when it is not true.

4. FIXING UP SIGNATORIES TO THE MEMORANDUM OF ASSOCIATION: Promoters have to decide about the members who will be signing the MOA of the proposed company.

5.APPOINTMENT OF PROFESSIONALS: Certain professionals such as mercantile, bankers auditors etc. are appointed by the promoters to assist them in the preparation of necessary documents which are required to be filed with the registrar of companies.

6. PREPARATION OF NECESSARY DOCUMENTS: The promoter takes up steps to get prepared certain legal documents, which have to be submitted under the law, to the registrar of the companies for getting the company registered. These documents are MEMORANDUM OF ASSOCIATION (MOA) and ARTICLES OF ASSOCIATION (AOA).