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.
A Hawaii Preincorporation Agreement between Incorporates and Promoters, also known as a Promoters' Agreement, is a legally binding document outlining the terms and conditions agreed upon by the individuals initiating a corporation in the state of Hawaii. This agreement serves as a foundation to establish the rights, responsibilities, and obligations of both the incorporates and promoters involved in the formation of a corporation. Key Elements of a Hawaii Preincorporation Agreement: 1. Corporation Formation: The agreement includes details about the intended corporation, such as the proposed name, purpose, business activities, and registered office address in Hawaii. 2. Roles and Responsibilities: It outlines the specific roles and responsibilities of each individual involved. Incorporates are the individuals initiating the corporation, while promoters are responsible for organizing and promoting the corporation's business activities. 3. Share Ownership: The agreement describes the shares of the corporation and the ownership distribution among the incorporates and promoters. It outlines the number of shares each individual will be entitled to and the conditions related to the transfer or sale of shares. 4. Capital Contributions: The agreement may specify the amount and nature of capital contributions required from the promoters or the conditions surrounding their reimbursement. 5. Intellectual Property: If the promoters possess any intellectual property, the agreement discusses the ownership, transfer, or licensing of such property to the newly formed corporation. 6. Confidentiality and Non-Disclosure: To protect the corporation's interests, the agreement may include confidentiality clauses preventing the promoters from disclosing sensitive information about the corporation during the preincorporation phase. 7. Liability: This section outlines any limits on the liability of the promoters and incorporates during the preincorporation phase. It may include provisions stating that the promoters shall bear responsibility for any losses or liabilities incurred until the corporation is officially incorporated. Different Types of Hawaii Preincorporation Agreements: 1. Standard Preincorporation Agreement: This is a general agreement used for most corporation formations in Hawaii. It covers the fundamental aspects discussed above. 2. Specialized Preincorporation Agreement: Depending on the nature of the corporation or industry, additional clauses or specific terms may be included to address unique circumstances. For example, if the corporation intends to engage in research and development activities, the agreement might include provisions for safeguarding intellectual property rights. In conclusion, a Hawaii Preincorporation Agreement between Incorporates and Promoters is a crucial document that outlines the terms, conditions, and obligations concerning the formation of a corporation in Hawaii. It helps establish a clear understanding and framework for the incorporates and promoters to follow during the preincorporation phase.A Hawaii Preincorporation Agreement between Incorporates and Promoters, also known as a Promoters' Agreement, is a legally binding document outlining the terms and conditions agreed upon by the individuals initiating a corporation in the state of Hawaii. This agreement serves as a foundation to establish the rights, responsibilities, and obligations of both the incorporates and promoters involved in the formation of a corporation. Key Elements of a Hawaii Preincorporation Agreement: 1. Corporation Formation: The agreement includes details about the intended corporation, such as the proposed name, purpose, business activities, and registered office address in Hawaii. 2. Roles and Responsibilities: It outlines the specific roles and responsibilities of each individual involved. Incorporates are the individuals initiating the corporation, while promoters are responsible for organizing and promoting the corporation's business activities. 3. Share Ownership: The agreement describes the shares of the corporation and the ownership distribution among the incorporates and promoters. It outlines the number of shares each individual will be entitled to and the conditions related to the transfer or sale of shares. 4. Capital Contributions: The agreement may specify the amount and nature of capital contributions required from the promoters or the conditions surrounding their reimbursement. 5. Intellectual Property: If the promoters possess any intellectual property, the agreement discusses the ownership, transfer, or licensing of such property to the newly formed corporation. 6. Confidentiality and Non-Disclosure: To protect the corporation's interests, the agreement may include confidentiality clauses preventing the promoters from disclosing sensitive information about the corporation during the preincorporation phase. 7. Liability: This section outlines any limits on the liability of the promoters and incorporates during the preincorporation phase. It may include provisions stating that the promoters shall bear responsibility for any losses or liabilities incurred until the corporation is officially incorporated. Different Types of Hawaii Preincorporation Agreements: 1. Standard Preincorporation Agreement: This is a general agreement used for most corporation formations in Hawaii. It covers the fundamental aspects discussed above. 2. Specialized Preincorporation Agreement: Depending on the nature of the corporation or industry, additional clauses or specific terms may be included to address unique circumstances. For example, if the corporation intends to engage in research and development activities, the agreement might include provisions for safeguarding intellectual property rights. In conclusion, a Hawaii Preincorporation Agreement between Incorporates and Promoters is a crucial document that outlines the terms, conditions, and obligations concerning the formation of a corporation in Hawaii. It helps establish a clear understanding and framework for the incorporates and promoters to follow during the preincorporation phase.
