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.
Mississippi Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by the parties involved in the formation of a corporation in the state of Mississippi. This agreement serves as a preliminary step before the actual incorporation process takes place. The Mississippi Preincorporation Agreement defines the rights, responsibilities, and obligations of both the incorporates and promoters, setting the framework for the subsequent incorporation. It ensures that all parties involved are on the same page and provides clarity regarding the formation process. Key elements included in the Mississippi Preincorporation Agreement are: 1. Identification of Parties: The agreement contains the names and contact details of the incorporates and promoters involved in the corporation's formation. This allows for clear identification of the parties involved. 2. Purpose of the Corporation: The agreement specifies the objectives, goals, and purpose for which the corporation is being formed. It outlines the primary nature of the business and the activities the corporation will engage in. 3. Capital Contribution: The preincorporation agreement outlines the amount and nature of capital contributions each incorporated will make towards the corporation. This includes any initial financial investments or assets contributed to fund the corporation's operations. 4. Allocation of Shares: The agreement describes how shares of the corporation will be allocated among the incorporates. It includes details such as the number of shares each incorporated will receive and the terms for their transferability. 5. Liability and Indemnification: The agreement clarifies the extent of liability incurred by the incorporates and promoters during the preincorporation stage. It also includes provisions for indemnification, protecting the parties from legal liabilities arising from their actions before incorporation. 6. Confidentiality and Non-Competition: The agreement may include clauses to maintain confidentiality of sensitive information shared among the parties involved. Non-competition clauses may also be included to prevent the incorporates and promoters from engaging in any competing activities during the preincorporation phase. It is important to note that while a generic Mississippi Preincorporation Agreement between Incorporates and Promoters exists, it can be customized according to the specific needs and requirements of the parties involved. Different types or variations of the agreement may arise based on the nature of the business, the number of incorporates, and other unique circumstances. It is always advisable to consult with a qualified attorney when drafting or entering into a Mississippi Preincorporation Agreement, ensuring its compliance with relevant state laws and regulations.Mississippi Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by the parties involved in the formation of a corporation in the state of Mississippi. This agreement serves as a preliminary step before the actual incorporation process takes place. The Mississippi Preincorporation Agreement defines the rights, responsibilities, and obligations of both the incorporates and promoters, setting the framework for the subsequent incorporation. It ensures that all parties involved are on the same page and provides clarity regarding the formation process. Key elements included in the Mississippi Preincorporation Agreement are: 1. Identification of Parties: The agreement contains the names and contact details of the incorporates and promoters involved in the corporation's formation. This allows for clear identification of the parties involved. 2. Purpose of the Corporation: The agreement specifies the objectives, goals, and purpose for which the corporation is being formed. It outlines the primary nature of the business and the activities the corporation will engage in. 3. Capital Contribution: The preincorporation agreement outlines the amount and nature of capital contributions each incorporated will make towards the corporation. This includes any initial financial investments or assets contributed to fund the corporation's operations. 4. Allocation of Shares: The agreement describes how shares of the corporation will be allocated among the incorporates. It includes details such as the number of shares each incorporated will receive and the terms for their transferability. 5. Liability and Indemnification: The agreement clarifies the extent of liability incurred by the incorporates and promoters during the preincorporation stage. It also includes provisions for indemnification, protecting the parties from legal liabilities arising from their actions before incorporation. 6. Confidentiality and Non-Competition: The agreement may include clauses to maintain confidentiality of sensitive information shared among the parties involved. Non-competition clauses may also be included to prevent the incorporates and promoters from engaging in any competing activities during the preincorporation phase. It is important to note that while a generic Mississippi Preincorporation Agreement between Incorporates and Promoters exists, it can be customized according to the specific needs and requirements of the parties involved. Different types or variations of the agreement may arise based on the nature of the business, the number of incorporates, and other unique circumstances. It is always advisable to consult with a qualified attorney when drafting or entering into a Mississippi Preincorporation Agreement, ensuring its compliance with relevant state laws and regulations.
