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 Pennsylvania Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the agreement and responsibilities between individuals (incorporates) and companies or individuals (promoters) who are involved in the process of forming a new corporation in the state of Pennsylvania. Keywords that can be included in the content are: 1. Pennsylvania Preincorporation Agreement: This specifically highlights the document's relevance to the state of Pennsylvania and indicates that it is legally binding within this jurisdiction. 2. Incorporates: Refers to the individuals who initiate the process of forming a corporation. Incorporates typically file the necessary paperwork and take the necessary steps to establish a new company. 3. Promoters: Refers to the entities or individuals who identify a business opportunity, gather resources, and attract potential investors for the newly formed corporation. Promoters are usually involved in activities such as market research, feasibility studies, and initial fundraising. 4. Agreement: This highlights the legally binding and contractual nature of the document. It denotes that both parties involved (incorporates and promoters) are entering into a mutual understanding and contractual relationship. 5. Responsibilities: Refers to the specific duties and obligations of each party involved in the agreement. This section can include details such as the role of each party, decision-making process, distribution of equity, and any conditions or restrictions. 6. Types of Preincorporation Agreements: In addition to a general Pennsylvania Preincorporation Agreement, there may be specific types based on the nature of the corporation being formed. For example, there may be agreements tailored for corporations involving technology, real estate, or healthcare sectors. These specialized agreements may focus on industry-specific regulations, intellectual property, or product development. 7. Ownership and Equity Distribution: This section can detail how ownership shares of the corporation will be allocated among the incorporates and promoters. Terms such as stock options, preferred stock, equity investment, and vesting schedules may be included. 8. Confidentiality and Non-Disclosure: An important aspect of any agreement, this section can highlight the need for both parties to maintain the confidentiality of proprietary information, trade secrets, and intellectual property during the preincorporation stage. 9. Indemnification: This section emphasizes the protection of each party against potential legal claims, losses, or damages that may arise during the preincorporation process. 10. Termination and Amendment: This section can outline the conditions under which the agreement can be terminated or amended, including any procedures or notifications required. It is important to note that consulting with a legal professional is highly recommended ensuring the specific requirements under Pennsylvania law are adequately addressed in the Pennsylvania Preincorporation Agreement between Incorporates and Promoters.A Pennsylvania Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the agreement and responsibilities between individuals (incorporates) and companies or individuals (promoters) who are involved in the process of forming a new corporation in the state of Pennsylvania. Keywords that can be included in the content are: 1. Pennsylvania Preincorporation Agreement: This specifically highlights the document's relevance to the state of Pennsylvania and indicates that it is legally binding within this jurisdiction. 2. Incorporates: Refers to the individuals who initiate the process of forming a corporation. Incorporates typically file the necessary paperwork and take the necessary steps to establish a new company. 3. Promoters: Refers to the entities or individuals who identify a business opportunity, gather resources, and attract potential investors for the newly formed corporation. Promoters are usually involved in activities such as market research, feasibility studies, and initial fundraising. 4. Agreement: This highlights the legally binding and contractual nature of the document. It denotes that both parties involved (incorporates and promoters) are entering into a mutual understanding and contractual relationship. 5. Responsibilities: Refers to the specific duties and obligations of each party involved in the agreement. This section can include details such as the role of each party, decision-making process, distribution of equity, and any conditions or restrictions. 6. Types of Preincorporation Agreements: In addition to a general Pennsylvania Preincorporation Agreement, there may be specific types based on the nature of the corporation being formed. For example, there may be agreements tailored for corporations involving technology, real estate, or healthcare sectors. These specialized agreements may focus on industry-specific regulations, intellectual property, or product development. 7. Ownership and Equity Distribution: This section can detail how ownership shares of the corporation will be allocated among the incorporates and promoters. Terms such as stock options, preferred stock, equity investment, and vesting schedules may be included. 8. Confidentiality and Non-Disclosure: An important aspect of any agreement, this section can highlight the need for both parties to maintain the confidentiality of proprietary information, trade secrets, and intellectual property during the preincorporation stage. 9. Indemnification: This section emphasizes the protection of each party against potential legal claims, losses, or damages that may arise during the preincorporation process. 10. Termination and Amendment: This section can outline the conditions under which the agreement can be terminated or amended, including any procedures or notifications required. It is important to note that consulting with a legal professional is highly recommended ensuring the specific requirements under Pennsylvania law are adequately addressed in the Pennsylvania Preincorporation Agreement between Incorporates and Promoters.
