A promoter is a person who starts up a business, particularly a corporation, including the financing. The formation of a corporation starts with an idea. Preincorporation activities transform this idea into an actual corporation. The individual who carries on these preincorporation activities is called a promoter. Usually the promoter is the main shareholder or one of the management team and receives stock for his/her efforts in organization. Most states limit the amount of "promotional stock" since it is supported only by effort and not by assets or cash. If preincorporation contracts are executed by the promoter in his/her own name and there is no further action, the promoter is personally liable on them, and the corporation is not.
Under the Federal Securities Act of 1933, a pre-organization certificate or subscription is included in the definition of a security. Therefore, a contract to issue securities in the future is itself a contract for the sale of securities. In order to secure an exemption, all stock subscription agreements involving intrastate offerings should contain representations by the purchasers that they are bona fide residents of the state of which the issuer is a resident and that they are purchasing the securities for their own account and not with the view to reselling them to nonresidents. A stock transfer restriction running for a period of at least one year or for nine months after the last sale of the issue by the issuer is customarily included to insure that securities have not only been initially sold to residents, but have "come to rest" in the hands of residents.
Title: Understanding the Alaska Preincorporation Agreement between Incorporates and Promoters Introduction: The Alaska Preincorporation Agreement between Incorporates and Promoters is a crucial legal document that outlines the terms and conditions agreed upon by individuals or entities involved in the process of incorporating a business in the state of Alaska. This agreement acts as a foundation for the future corporation, providing clarity regarding the responsibilities, financial aspects, and legal obligations of the incorporates and promoters. In Alaska, there are two commonly used types of preincorporation agreements: General Alaska Preincorporation Agreement and Alaska Preincorporation Agreement for Nonprofit Corporations. 1. General Alaska Preincorporation Agreement: The General Alaska Preincorporation Agreement between Incorporates and Promoters is designed for for-profit business entities seeking to establish a corporation in Alaska. It serves as a contractual agreement that addresses various aspects, such as the purpose of the corporation, the allocation of shares, management structure, decision-making processes, and the transferability of shares. This agreement also outlines the rights, responsibilities, and liabilities of each incorporated and promoter involved in the incorporation process. 2. Alaska Preincorporation Agreement for Nonprofit Corporations: For nonprofit entities intending to establish a corporation in Alaska, the Alaska Preincorporation Agreement for Nonprofit Corporations is utilized. This agreement focuses on the specific requirements and regulations applicable to nonprofit organizations. It addresses the objectives of the corporation, the management structure, the handling of donations and funds, and the use of corporation assets for charitable purposes. The agreement also outlines the responsibilities and liabilities of the incorporates and promoters, emphasizing compliance with state and federal laws governing nonprofits. Key Terms and Sections: — Purpose and Objectives: Clearly states the primary goals and functions of the future corporation, ensuring a shared understanding among incorporates and promoters. — Share Allocation and Subscriptions: Specifies the number and value of shares to be issued, and the subscription terms for potential investors or shareholders. — Management Structure: Outlines the organizational structure, directors, officers, and their respective roles and responsibilities within the corporation. — Decision-Making and Voting: Defines the decision-making processes, including voting rights, quorum requirements, and procedures for board meetings and shareholder meetings. — Transferability of Shares: Details the conditions and restrictions associated with the transfer of shares, ensuring control and stability within the corporation. — Liabilities and Indemnity: Addresses potential liabilities of the incorporates and promoters, highlighting indemnification provisions to protect against legal risks. — Dissolution and Termination: Outlines the circumstances and procedures for the dissolution or termination of the corporation, including the distribution of assets and winding up of affairs. Conclusion: Understanding the Alaska Preincorporation Agreement between Incorporates and Promoters is crucial for individuals or entities planning to establish corporations in Alaska. This agreement, whether for for-profit or nonprofit entities, accurately defines the roles, responsibilities, and legal framework necessary for the successful incorporation of a business. By tailoring the agreement to meet the specific needs of the organization, incorporates and promoters can promote a solid foundation for their future corporation in accordance with Alaska state laws.Title: Understanding the Alaska Preincorporation Agreement between Incorporates and Promoters Introduction: The Alaska Preincorporation Agreement between Incorporates and Promoters is a crucial legal document that outlines the terms and conditions agreed upon by individuals or entities involved in the process of incorporating a business in the state of Alaska. This agreement acts as a foundation for the future corporation, providing clarity regarding the responsibilities, financial aspects, and legal obligations of the incorporates and promoters. In Alaska, there are two commonly used types of preincorporation agreements: General Alaska Preincorporation Agreement and Alaska Preincorporation Agreement for Nonprofit Corporations. 1. General Alaska Preincorporation Agreement: The General Alaska Preincorporation Agreement between Incorporates and Promoters is designed for for-profit business entities seeking to establish a corporation in Alaska. It serves as a contractual agreement that addresses various aspects, such as the purpose of the corporation, the allocation of shares, management structure, decision-making processes, and the transferability of shares. This agreement also outlines the rights, responsibilities, and liabilities of each incorporated and promoter involved in the incorporation process. 2. Alaska Preincorporation Agreement for Nonprofit Corporations: For nonprofit entities intending to establish a corporation in Alaska, the Alaska Preincorporation Agreement for Nonprofit Corporations is utilized. This agreement focuses on the specific requirements and regulations applicable to nonprofit organizations. It addresses the objectives of the corporation, the management structure, the handling of donations and funds, and the use of corporation assets for charitable purposes. The agreement also outlines the responsibilities and liabilities of the incorporates and promoters, emphasizing compliance with state and federal laws governing nonprofits. Key Terms and Sections: — Purpose and Objectives: Clearly states the primary goals and functions of the future corporation, ensuring a shared understanding among incorporates and promoters. — Share Allocation and Subscriptions: Specifies the number and value of shares to be issued, and the subscription terms for potential investors or shareholders. — Management Structure: Outlines the organizational structure, directors, officers, and their respective roles and responsibilities within the corporation. — Decision-Making and Voting: Defines the decision-making processes, including voting rights, quorum requirements, and procedures for board meetings and shareholder meetings. — Transferability of Shares: Details the conditions and restrictions associated with the transfer of shares, ensuring control and stability within the corporation. — Liabilities and Indemnity: Addresses potential liabilities of the incorporates and promoters, highlighting indemnification provisions to protect against legal risks. — Dissolution and Termination: Outlines the circumstances and procedures for the dissolution or termination of the corporation, including the distribution of assets and winding up of affairs. Conclusion: Understanding the Alaska Preincorporation Agreement between Incorporates and Promoters is crucial for individuals or entities planning to establish corporations in Alaska. This agreement, whether for for-profit or nonprofit entities, accurately defines the roles, responsibilities, and legal framework necessary for the successful incorporation of a business. By tailoring the agreement to meet the specific needs of the organization, incorporates and promoters can promote a solid foundation for their future corporation in accordance with Alaska state laws.
