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 Iowa Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the agreement and responsibilities between the incorporates and promoters during the process of forming a corporation in the state of Iowa. This agreement plays a crucial role in safeguarding the interests and intentions of both parties involved in the incorporation process. The agreement typically includes various key elements, such as: 1. Purpose: This section explicitly states the purpose of the agreement, which is to establish the roles, responsibilities, and obligations of the incorporates and promoters. 2. Identification of Parties: The agreement identifies the individuals or entities involved in the formation of the corporation, specifically the incorporates and promoters. It includes their full names, addresses, and contact details. 3. Roles and Responsibilities: This section defines the specific roles and responsibilities of the incorporates and promoters throughout the incorporation process. It ensures clarity in the division of tasks, such as drafting and filing necessary documents, securing permits and licenses, fundraising, and other relevant activities. 4. Contribution and Compensation: The agreement may outline the financial or other contributions made by the promoters to support the incorporation process. It may also specify the compensation or rewards the promoters may receive for their efforts. 5. Ownership and Equity Distribution: If applicable, the agreement may address the ownership rights and equity distribution among the promoters or the anticipated future shareholders. 6. Timeline: This section outlines the anticipated timeline for the completion of specific tasks related to the incorporation process, setting milestones and deadlines to ensure efficient progress. Some possible types of Iowa Preincorporation Agreements between Incorporates and Promoters may include: 1. Standard Agreement: This is a general template agreement that covers the common aspects of the incorporation process, applicable to most business types. 2. Agreement for Nonprofit Organizations: If the purpose of the corporation is to establish a nonprofit organization, this type of agreement may include specific clauses related to compliance with Iowa's nonprofit laws and regulations. 3. Agreement for Closely-Held Corporations: In the case of closely-held corporations, where a small group of individuals forms the corporation, the agreement may include additional provisions related to share ownership and transfer restrictions. 4. Agreement for Professional Corporations: For professionals forming a corporation, such as doctors, lawyers, or accountants, an agreement tailored to address the specific requirements and regulations of their respective professions may be necessary. The above description provides an overview of what an Iowa Preincorporation Agreement between Incorporates and Promoters entails, highlighting key elements and exploring possible variations or types based on the specific needs and nature of the corporation being formed.The Iowa Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the agreement and responsibilities between the incorporates and promoters during the process of forming a corporation in the state of Iowa. This agreement plays a crucial role in safeguarding the interests and intentions of both parties involved in the incorporation process. The agreement typically includes various key elements, such as: 1. Purpose: This section explicitly states the purpose of the agreement, which is to establish the roles, responsibilities, and obligations of the incorporates and promoters. 2. Identification of Parties: The agreement identifies the individuals or entities involved in the formation of the corporation, specifically the incorporates and promoters. It includes their full names, addresses, and contact details. 3. Roles and Responsibilities: This section defines the specific roles and responsibilities of the incorporates and promoters throughout the incorporation process. It ensures clarity in the division of tasks, such as drafting and filing necessary documents, securing permits and licenses, fundraising, and other relevant activities. 4. Contribution and Compensation: The agreement may outline the financial or other contributions made by the promoters to support the incorporation process. It may also specify the compensation or rewards the promoters may receive for their efforts. 5. Ownership and Equity Distribution: If applicable, the agreement may address the ownership rights and equity distribution among the promoters or the anticipated future shareholders. 6. Timeline: This section outlines the anticipated timeline for the completion of specific tasks related to the incorporation process, setting milestones and deadlines to ensure efficient progress. Some possible types of Iowa Preincorporation Agreements between Incorporates and Promoters may include: 1. Standard Agreement: This is a general template agreement that covers the common aspects of the incorporation process, applicable to most business types. 2. Agreement for Nonprofit Organizations: If the purpose of the corporation is to establish a nonprofit organization, this type of agreement may include specific clauses related to compliance with Iowa's nonprofit laws and regulations. 3. Agreement for Closely-Held Corporations: In the case of closely-held corporations, where a small group of individuals forms the corporation, the agreement may include additional provisions related to share ownership and transfer restrictions. 4. Agreement for Professional Corporations: For professionals forming a corporation, such as doctors, lawyers, or accountants, an agreement tailored to address the specific requirements and regulations of their respective professions may be necessary. The above description provides an overview of what an Iowa Preincorporation Agreement between Incorporates and Promoters entails, highlighting key elements and exploring possible variations or types based on the specific needs and nature of the corporation being formed.
