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 Kansas Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by individuals involved in the initial stages of forming a corporation in the state of Kansas. This agreement serves as a binding contract that establishes the responsibilities and obligations of both the incorporates and promoters before the corporation is officially incorporated. This agreement typically contains various key elements to ensure clarity and proper understanding between the parties involved. These elements may include: 1. Parties: The agreement identifies and provides the details of the incorporates and promoters involved in the formation of the corporation. It may specify the names, addresses, and contact information of all parties. 2. Purpose: The agreement states the primary purpose of forming the corporation and outlines the objectives and goals the parties aim to achieve. 3. Promoter's Obligations: This section outlines the specific responsibilities and duties of the promoter(s) involved in the preincorporation process. It may include tasks such as identifying potential investors, securing funding, drafting legal documentation, and facilitating the incorporation process. 4. Incorporates' Obligations: The agreement details the obligations and responsibilities of the incorporates, who are responsible for executing the necessary legal actions to officially create the corporation. This may involve filing necessary documents, obtaining required permits or licenses, and ensuring compliance with state laws. 5. Capital Contributions: If applicable, the agreement may define the contributions or investments made by the promoter(s) and incorporated(s) to finance the formation of the corporation. It outlines the amount, type, and timing of capital contributions. 6. Ownership and Equity Distribution: In cases where there are multiple incorporates or promoters, the agreement may address the allocation and distribution of ownership interests or equity amongst them. It may specify the percentage or shares of ownership, voting rights, and potential dilution mechanisms. 7. Confidentiality and Non-Competition: To protect sensitive information, the agreement may include clauses regarding the confidentiality of business-related details and trade secrets. It may also address non-competition provisions to prevent promoters from engaging in activities that could compete with the corporation's business prospects. 8. Governing Law and Dispute Resolution: The agreement typically specifies the governing law of the agreement, which is Kansas in this case. It may also outline the mechanisms for resolving disputes, such as mediation or arbitration, to mitigate potential conflicts between the parties. It is worth noting that while the general structure of the Kansas Preincorporation Agreement between Incorporates and Promoters remains consistent, the specific terms and language used may vary depending on individual circumstances, the nature of the corporation being formed, and the preferences of the parties involved. Different variations or types of preincorporation agreements may exist, such as those tailored for specific industries (e.g., technology or healthcare) or agreements that include additional provisions such as intellectual property assignment or employment/consulting arrangements. Overall, the Kansas Preincorporation Agreement between Incorporates and Promoters is a crucial legal document that lays the groundwork and ensures a clear understanding amongst parties involved in forming a corporation in Kansas.The Kansas Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by individuals involved in the initial stages of forming a corporation in the state of Kansas. This agreement serves as a binding contract that establishes the responsibilities and obligations of both the incorporates and promoters before the corporation is officially incorporated. This agreement typically contains various key elements to ensure clarity and proper understanding between the parties involved. These elements may include: 1. Parties: The agreement identifies and provides the details of the incorporates and promoters involved in the formation of the corporation. It may specify the names, addresses, and contact information of all parties. 2. Purpose: The agreement states the primary purpose of forming the corporation and outlines the objectives and goals the parties aim to achieve. 3. Promoter's Obligations: This section outlines the specific responsibilities and duties of the promoter(s) involved in the preincorporation process. It may include tasks such as identifying potential investors, securing funding, drafting legal documentation, and facilitating the incorporation process. 4. Incorporates' Obligations: The agreement details the obligations and responsibilities of the incorporates, who are responsible for executing the necessary legal actions to officially create the corporation. This may involve filing necessary documents, obtaining required permits or licenses, and ensuring compliance with state laws. 5. Capital Contributions: If applicable, the agreement may define the contributions or investments made by the promoter(s) and incorporated(s) to finance the formation of the corporation. It outlines the amount, type, and timing of capital contributions. 6. Ownership and Equity Distribution: In cases where there are multiple incorporates or promoters, the agreement may address the allocation and distribution of ownership interests or equity amongst them. It may specify the percentage or shares of ownership, voting rights, and potential dilution mechanisms. 7. Confidentiality and Non-Competition: To protect sensitive information, the agreement may include clauses regarding the confidentiality of business-related details and trade secrets. It may also address non-competition provisions to prevent promoters from engaging in activities that could compete with the corporation's business prospects. 8. Governing Law and Dispute Resolution: The agreement typically specifies the governing law of the agreement, which is Kansas in this case. It may also outline the mechanisms for resolving disputes, such as mediation or arbitration, to mitigate potential conflicts between the parties. It is worth noting that while the general structure of the Kansas Preincorporation Agreement between Incorporates and Promoters remains consistent, the specific terms and language used may vary depending on individual circumstances, the nature of the corporation being formed, and the preferences of the parties involved. Different variations or types of preincorporation agreements may exist, such as those tailored for specific industries (e.g., technology or healthcare) or agreements that include additional provisions such as intellectual property assignment or employment/consulting arrangements. Overall, the Kansas Preincorporation Agreement between Incorporates and Promoters is a crucial legal document that lays the groundwork and ensures a clear understanding amongst parties involved in forming a corporation in Kansas.
