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.
The Arkansas Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by the incorporates and promoters involved in the formation of a corporation in the state of Arkansas. This agreement serves as a blueprint for the corporation's formation and sets forth important provisions that will govern the preincorporation stage. Key provisions typically included in the Arkansas Preincorporation Agreement cover various aspects of the corporation's formation process. These provisions may address the purpose and goals of the corporation, the roles and responsibilities of each incorporated and promoter, as well as the distribution of shares or ownership in the company. The agreement may also outline the initial capital contributions made by each party and the procedures governing the allocation of profits and losses during the preincorporation phase. Furthermore, the Arkansas Preincorporation Agreement may include provisions related to the transferability of shares, restrictions on the sale or assignment of interests by incorporates and promoters, and any additional requirements for entering into a binding agreement. This document can also establish guidelines for resolving disputes between the parties and outline the steps for terminating the agreement in certain circumstances. While the Arkansas Preincorporation Agreement between Incorporates and Promoters generally covers these fundamental provisions, variations of this agreement may exist depending on the specific needs and circumstances of the corporation. For instance, there may be different types of agreements tailored for specific industries or businesses, such as technology or healthcare. Additionally, the agreement can be customized based on the size of the corporation and the number of incorporates involved. In conclusion, the Arkansas Preincorporation Agreement between Incorporates and Promoters is a crucial document that sets the foundational framework for the formation of a corporation in Arkansas. By outlining the rights, duties, and obligations of each party involved, this agreement helps ensure a smooth and organized preincorporation process.The Arkansas Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by the incorporates and promoters involved in the formation of a corporation in the state of Arkansas. This agreement serves as a blueprint for the corporation's formation and sets forth important provisions that will govern the preincorporation stage. Key provisions typically included in the Arkansas Preincorporation Agreement cover various aspects of the corporation's formation process. These provisions may address the purpose and goals of the corporation, the roles and responsibilities of each incorporated and promoter, as well as the distribution of shares or ownership in the company. The agreement may also outline the initial capital contributions made by each party and the procedures governing the allocation of profits and losses during the preincorporation phase. Furthermore, the Arkansas Preincorporation Agreement may include provisions related to the transferability of shares, restrictions on the sale or assignment of interests by incorporates and promoters, and any additional requirements for entering into a binding agreement. This document can also establish guidelines for resolving disputes between the parties and outline the steps for terminating the agreement in certain circumstances. While the Arkansas Preincorporation Agreement between Incorporates and Promoters generally covers these fundamental provisions, variations of this agreement may exist depending on the specific needs and circumstances of the corporation. For instance, there may be different types of agreements tailored for specific industries or businesses, such as technology or healthcare. Additionally, the agreement can be customized based on the size of the corporation and the number of incorporates involved. In conclusion, the Arkansas Preincorporation Agreement between Incorporates and Promoters is a crucial document that sets the foundational framework for the formation of a corporation in Arkansas. By outlining the rights, duties, and obligations of each party involved, this agreement helps ensure a smooth and organized preincorporation process.
