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 Minnesota Preincorporation Agreement between Incorporates and Promoters is a legal document completed before the incorporation of a business entity in the state of Minnesota. This agreement outlines various important details and provisions that govern the relationship between the incorporates and promoters involved in the formation of the company. It serves as a contractual understanding between the key parties involved, ensuring clarity and transparency in the preincorporation stages. Some relevant keywords to consider for this description include: 1. Minnesota: This refers to the specific state where the preincorporation agreement is relevant and legally binding. 2. Preincorporation Agreement: A written contract entered into by the incorporates and promoters before the official incorporation of a new business entity. 3. Incorporates: Individuals or entities responsible for initiating the process of creating a corporation. 4. Promoters: Individuals or entities who play a pivotal role in organizing and establishing a new company. 5. Legal Document: A written agreement that holds legal significance, establishing rights, obligations, and terms for the parties involved. 6. Incorporation: The formal process of creating a legal entity, such as a corporation or limited liability company (LLC). 7. Relationship: The connection and interaction between the incorporates and promoters during the company's formation. 8. Provisions: Specific clauses or terms detailing the rights, responsibilities, and obligations of the parties involved in the preincorporation stage. Regarding different types of Minnesota Preincorporation Agreement between Incorporates and Promoters, although there may not be specifically categorized types, the content of the agreement can vary depending on the particular requirements of the parties involved. As such, each preincorporation agreement may differ based on factors such as the nature of the business, the parties' roles and responsibilities, ownership structure, capital contributions, proposed bylaws, and other relevant considerations. Therefore, it is important for the incorporates and promoters to carefully draft and customize the preincorporation agreement according to their unique business needs while ensuring compliance with Minnesota state laws and regulations. Seeking professional legal advice when preparing this agreement is highly recommended ensuring that the document accurately represents the intentions and expectations of all parties involved.A Minnesota Preincorporation Agreement between Incorporates and Promoters is a legal document completed before the incorporation of a business entity in the state of Minnesota. This agreement outlines various important details and provisions that govern the relationship between the incorporates and promoters involved in the formation of the company. It serves as a contractual understanding between the key parties involved, ensuring clarity and transparency in the preincorporation stages. Some relevant keywords to consider for this description include: 1. Minnesota: This refers to the specific state where the preincorporation agreement is relevant and legally binding. 2. Preincorporation Agreement: A written contract entered into by the incorporates and promoters before the official incorporation of a new business entity. 3. Incorporates: Individuals or entities responsible for initiating the process of creating a corporation. 4. Promoters: Individuals or entities who play a pivotal role in organizing and establishing a new company. 5. Legal Document: A written agreement that holds legal significance, establishing rights, obligations, and terms for the parties involved. 6. Incorporation: The formal process of creating a legal entity, such as a corporation or limited liability company (LLC). 7. Relationship: The connection and interaction between the incorporates and promoters during the company's formation. 8. Provisions: Specific clauses or terms detailing the rights, responsibilities, and obligations of the parties involved in the preincorporation stage. Regarding different types of Minnesota Preincorporation Agreement between Incorporates and Promoters, although there may not be specifically categorized types, the content of the agreement can vary depending on the particular requirements of the parties involved. As such, each preincorporation agreement may differ based on factors such as the nature of the business, the parties' roles and responsibilities, ownership structure, capital contributions, proposed bylaws, and other relevant considerations. Therefore, it is important for the incorporates and promoters to carefully draft and customize the preincorporation agreement according to their unique business needs while ensuring compliance with Minnesota state laws and regulations. Seeking professional legal advice when preparing this agreement is highly recommended ensuring that the document accurately represents the intentions and expectations of all parties involved.
