Somebody has to set up the company and in order to set up a company, there have to be promoters. The promoters will purchase property from which the company is going to operate and undertake the preliminary steps to set the company up. They will thus be acting before the company has been formed.
In Victorian Britain, there used to be professional company promoters. These promoters were often dishonest and acted fraudulently. The Anglo-Bengalee Disinterested Loan and Life Assuarance Company, mercilessly lampooned by Dickens in “Martin Chuzzlewitt”, the typical of the sort of situation that arose. Indeed Albert Giant, who features in some of the prominent late Victorian cases concerning company promotion, is assumed to be the inspiration for the villain, Augustrus Melmotte in Trollope’s “The Way We Live Now”.
A code of rule therefore developed to ensure that promoters acted with integring in setting up the company.
There are few statutory rules in this area and indeed no statisfactory statutory definition of a promoter S67 of the companies Act 1985 formerly defined a promoter in S67(3) as a person who is “a party to the preparation of the prospectus or a portion of it”.
In the absence of any precise definition in statute, resort must be had to judicial statements relating to promotion. As Gross notes in “who is a company promoters?”  86 LQR 493, the term “promoter” is ill defined by companies legislation. The usual dictum referred to in defining a promoter is that of Cockburn CJ in Twycross vs Grant (1877) 2 CPD469 where he said that a promoter is “one who undertakes to form a company with reference to a given project and to set it going and who takes the necessary teps to accomplish that purpose. This definition is clearly somewhat general. In Whaley Bridge Calico Printing Co vs green (1880) 5QBD 109, Browen J said;
“ The term promoter is a term not of law, but of business usefully summing up in a single word a number of...