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 Nevada Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by the parties involved in forming a corporation in the state of Nevada. This agreement is typically drafted before the official incorporation process begins and serves as a crucial foundation for the future corporate structure. Keywords: Nevada, Preincorporation Agreement, Incorporates, Promoters, corporation, legal document, terms and conditions, corporate structure. There are no distinct types of Nevada Preincorporation Agreement between Incorporates and Promoters; however, the agreement can cover various essential aspects and provisions to meet the specific needs of the parties involved. 1. Parties: The agreement identifies the incorporates, who are the individuals responsible for initiating the incorporation process, and the promoters, who are usually involved in promoting the formation of the corporation by arranging for funds, properties, or other resources necessary for its establishment. 2. Purpose and Nature of the Agreement: The agreement clearly defines its purpose, stating that it is a preincorporation agreement designed to establish governance principles, equity distribution, and financial obligations between the incorporates and promoters before formal incorporation. 3. Equity Distribution: This section outlines the allocation of shares or ownership interests among the incorporates and promoters. It may specify the percentage of shares each party will receive, along with any conditions or requirements for maintaining ownership. 4. Roles and Responsibilities: The agreement describes the specific roles, responsibilities, and duties of each incorporated and promoter. This can include obligations related to securing necessary permits, licenses, and registrations, preparing corporate bylaws, organizing initial meetings, or taking any other actions required for incorporation. 5. Financial Contributions: It is common for promoters to make financial contributions to initiate the corporation's formation. The agreement details the contributions made by each party, ensuring transparency and establishing clear guidelines for reimbursement or future capitalization. 6. Confidentiality and Non-competition: To protect the corporation's interests during the preincorporation phase, this section typically includes provisions to maintain the confidentiality of sensitive information shared among the parties. Additionally, it may establish non-competition clauses preventing incorporates and promoters from engaging in activities that could negatively impact the corporation during the preincorporation period. 7. Term of Agreement: The agreement specifies the duration and validity of its terms, ensuring that its provisions remain binding until the corporation is officially incorporated and the necessary formation documents are filed with the state of Nevada. It is important to consult with a legal professional to draft a comprehensive Nevada Preincorporation Agreement between Incorporates and Promoters tailored to the unique requirements of the proposed corporation.A Nevada Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by the parties involved in forming a corporation in the state of Nevada. This agreement is typically drafted before the official incorporation process begins and serves as a crucial foundation for the future corporate structure. Keywords: Nevada, Preincorporation Agreement, Incorporates, Promoters, corporation, legal document, terms and conditions, corporate structure. There are no distinct types of Nevada Preincorporation Agreement between Incorporates and Promoters; however, the agreement can cover various essential aspects and provisions to meet the specific needs of the parties involved. 1. Parties: The agreement identifies the incorporates, who are the individuals responsible for initiating the incorporation process, and the promoters, who are usually involved in promoting the formation of the corporation by arranging for funds, properties, or other resources necessary for its establishment. 2. Purpose and Nature of the Agreement: The agreement clearly defines its purpose, stating that it is a preincorporation agreement designed to establish governance principles, equity distribution, and financial obligations between the incorporates and promoters before formal incorporation. 3. Equity Distribution: This section outlines the allocation of shares or ownership interests among the incorporates and promoters. It may specify the percentage of shares each party will receive, along with any conditions or requirements for maintaining ownership. 4. Roles and Responsibilities: The agreement describes the specific roles, responsibilities, and duties of each incorporated and promoter. This can include obligations related to securing necessary permits, licenses, and registrations, preparing corporate bylaws, organizing initial meetings, or taking any other actions required for incorporation. 5. Financial Contributions: It is common for promoters to make financial contributions to initiate the corporation's formation. The agreement details the contributions made by each party, ensuring transparency and establishing clear guidelines for reimbursement or future capitalization. 6. Confidentiality and Non-competition: To protect the corporation's interests during the preincorporation phase, this section typically includes provisions to maintain the confidentiality of sensitive information shared among the parties. Additionally, it may establish non-competition clauses preventing incorporates and promoters from engaging in activities that could negatively impact the corporation during the preincorporation period. 7. Term of Agreement: The agreement specifies the duration and validity of its terms, ensuring that its provisions remain binding until the corporation is officially incorporated and the necessary formation documents are filed with the state of Nevada. It is important to consult with a legal professional to draft a comprehensive Nevada Preincorporation Agreement between Incorporates and Promoters tailored to the unique requirements of the proposed corporation.
