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 New Jersey Preincorporation Agreement is a legal document that outlines the agreements and understanding between the Incorporates (individuals or entities starting a corporation) and Promoters (individuals or entities responsible for organizing and promoting the incorporation process) before the actual incorporation of a company in New Jersey. This agreement helps establish the roles, responsibilities, and expectations of both parties involved, ensuring a smooth and efficient incorporation process. The New Jersey Preincorporation Agreement typically contains various key provisions, including: 1. Name and Purpose: The agreement starts by stating the proposed name of the corporation and its intended purpose. 2. Incorporates: It identifies the individuals or entities who will act as Incorporates, providing their names, addresses, and contact information. 3. Promoters: Similarly, it outlines the Promoters' information, including their names, addresses, and contact details. 4. Capital Contributions: This section determines the amount and nature of the initial contributions made by the Incorporates or Promoters to the corporation in terms of cash, property, or services. 5. Ownership and Allocation of Shares: The agreement addresses how the ownership of shares in the newly incorporated company will be allocated among the Incorporates or Promoters. 6. Management and Decision-making: It specifies the responsibilities and decision-making authority of the Incorporates or Promoters until the formation of the corporation's Board of Directors. 7. Confidentiality: Any confidential or proprietary information shared between the Incorporates and Promoters during the preincorporation process is protected under this provision. 8. Binding Agreement: The agreement stipulates that the terms agreed upon by the Incorporates and Promoters are legally binding once the corporation is incorporated. It is important to note that "New Jersey Preincorporation Agreement" can refer to a generic template used for various types of corporations or may also be specific to certain types of entities. For example, there might be unique preincorporation agreements for nonprofit corporations, professional corporations, or close corporations, each catering to the specific requirements and regulations governing these entities in New Jersey. In conclusion, a New Jersey Preincorporation Agreement between Incorporates and Promoters is a crucial legal document that establishes the groundwork for the future corporation. By clearly defining the roles, contributions, and expectations, this agreement helps ensure that the incorporation process proceeds smoothly and according to the agreed terms.A New Jersey Preincorporation Agreement is a legal document that outlines the agreements and understanding between the Incorporates (individuals or entities starting a corporation) and Promoters (individuals or entities responsible for organizing and promoting the incorporation process) before the actual incorporation of a company in New Jersey. This agreement helps establish the roles, responsibilities, and expectations of both parties involved, ensuring a smooth and efficient incorporation process. The New Jersey Preincorporation Agreement typically contains various key provisions, including: 1. Name and Purpose: The agreement starts by stating the proposed name of the corporation and its intended purpose. 2. Incorporates: It identifies the individuals or entities who will act as Incorporates, providing their names, addresses, and contact information. 3. Promoters: Similarly, it outlines the Promoters' information, including their names, addresses, and contact details. 4. Capital Contributions: This section determines the amount and nature of the initial contributions made by the Incorporates or Promoters to the corporation in terms of cash, property, or services. 5. Ownership and Allocation of Shares: The agreement addresses how the ownership of shares in the newly incorporated company will be allocated among the Incorporates or Promoters. 6. Management and Decision-making: It specifies the responsibilities and decision-making authority of the Incorporates or Promoters until the formation of the corporation's Board of Directors. 7. Confidentiality: Any confidential or proprietary information shared between the Incorporates and Promoters during the preincorporation process is protected under this provision. 8. Binding Agreement: The agreement stipulates that the terms agreed upon by the Incorporates and Promoters are legally binding once the corporation is incorporated. It is important to note that "New Jersey Preincorporation Agreement" can refer to a generic template used for various types of corporations or may also be specific to certain types of entities. For example, there might be unique preincorporation agreements for nonprofit corporations, professional corporations, or close corporations, each catering to the specific requirements and regulations governing these entities in New Jersey. In conclusion, a New Jersey Preincorporation Agreement between Incorporates and Promoters is a crucial legal document that establishes the groundwork for the future corporation. By clearly defining the roles, contributions, and expectations, this agreement helps ensure that the incorporation process proceeds smoothly and according to the agreed terms.
