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 Oregon Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by individuals (incorporates) who wish to form a corporation. This agreement is crucial in the preincorporation stage as it lays the groundwork for the corporation's formation and operation. It ensures that all parties involved are on the same page and provides clarity regarding their rights, duties, and obligations. The agreement typically includes the following key provisions: 1. Incorporated Information: The agreement identifies the names, addresses, and contact details of each incorporated and promoter involved in the formation of the corporation. 2. Purpose and Objective: It outlines the purpose, goals, and objectives of the corporation, specifying the nature of its business activities. 3. Incorporation Process: This section details the steps to be taken for the incorporation of the company, specifying the necessary legal documents, registrations, and filings required. 4. Ownership and Equity: The agreement addresses the distribution of ownership interests or shares among the incorporates and promoters. It specifies the percentage of ownership each individual will hold and outlines any rights or restrictions pertaining to these shares. 5. Management and Control: This section outlines how the corporation's management and decision-making process will be structured. It includes details about the board of directors, officers, committees, and their responsibilities. 6. Capital Contributions and Financing: The agreement discusses the initial capital contributions from the incorporates and promoters. It outlines the amount, timing, and method by which these funds will be provided to the corporation. Additionally, it may address future financing options and sources of funding. 7. Intellectual Property: If the corporation will utilize any intellectual property, such as patents or trademarks, the agreement will specify ownership, licensing, and usage rights. 8. Confidentiality and Non-Competition: This section includes provisions that restrict incorporates and promoters from disclosing confidential information or engaging in competitive activities that may harm the corporation during or after its formation. 9. Dispute Resolution: The agreement may outline the procedure for resolving disputes or conflicts among the incorporates and promoters, such as through negotiation, mediation, or arbitration. It is important to note that while the overall structure and content of the Preincorporation Agreement remain similar, its specific provisions may vary based on the unique requirements and objectives of the incorporates and promoters involved.The Oregon Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon by individuals (incorporates) who wish to form a corporation. This agreement is crucial in the preincorporation stage as it lays the groundwork for the corporation's formation and operation. It ensures that all parties involved are on the same page and provides clarity regarding their rights, duties, and obligations. The agreement typically includes the following key provisions: 1. Incorporated Information: The agreement identifies the names, addresses, and contact details of each incorporated and promoter involved in the formation of the corporation. 2. Purpose and Objective: It outlines the purpose, goals, and objectives of the corporation, specifying the nature of its business activities. 3. Incorporation Process: This section details the steps to be taken for the incorporation of the company, specifying the necessary legal documents, registrations, and filings required. 4. Ownership and Equity: The agreement addresses the distribution of ownership interests or shares among the incorporates and promoters. It specifies the percentage of ownership each individual will hold and outlines any rights or restrictions pertaining to these shares. 5. Management and Control: This section outlines how the corporation's management and decision-making process will be structured. It includes details about the board of directors, officers, committees, and their responsibilities. 6. Capital Contributions and Financing: The agreement discusses the initial capital contributions from the incorporates and promoters. It outlines the amount, timing, and method by which these funds will be provided to the corporation. Additionally, it may address future financing options and sources of funding. 7. Intellectual Property: If the corporation will utilize any intellectual property, such as patents or trademarks, the agreement will specify ownership, licensing, and usage rights. 8. Confidentiality and Non-Competition: This section includes provisions that restrict incorporates and promoters from disclosing confidential information or engaging in competitive activities that may harm the corporation during or after its formation. 9. Dispute Resolution: The agreement may outline the procedure for resolving disputes or conflicts among the incorporates and promoters, such as through negotiation, mediation, or arbitration. It is important to note that while the overall structure and content of the Preincorporation Agreement remain similar, its specific provisions may vary based on the unique requirements and objectives of the incorporates and promoters involved.
