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.
Connecticut Preincorporation Agreement between Incorporates and Promoters is a legally binding contract that outlines the various terms and conditions agreed upon by the incorporates and promoters involved in forming a corporation in Connecticut. This agreement serves as a blueprint for the formation and organization of the company before it is officially incorporated. The Connecticut Preincorporation Agreement typically covers essential aspects such as the purpose of the corporation, the roles and responsibilities of the incorporates and promoters, the allocation of shares, the initial capital contributions, and the distribution of profits and losses. The agreement also includes provisions regarding the management structure of the company, the appointment of directors and officers, and how decisions will be made within the corporation. It may outline the procedures for calling and conducting meetings, voting rights, and the process for resolving disputes among the incorporates and promoters. Furthermore, the Connecticut Preincorporation Agreement may include clauses regarding the transferability of shares, restrictions on the transfer of shares, and the right of first refusal, granting existing shareholders the opportunity to purchase shares before they are offered to external parties. In Connecticut, there are no specific types of Preincorporation Agreement between Incorporates and Promoters that have distinct legal names or classifications. However, there may be variations in the terms and specific clauses included in the agreement, depending on the unique circumstances of each corporation. For example, some agreements may include provisions for vesting schedules, which outline how ownership of shares will gradually transfer to certain individuals over time. In conclusion, the Connecticut Preincorporation Agreement between Incorporates and Promoters is a comprehensive contract that sets the foundation for the formation and operations of a corporation. It ensures that all parties involved are in agreement regarding the key aspects of the business before official incorporation takes place, providing a roadmap for the company's future success.
