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 South Carolina preincorporation agreement between incorporates and promoters is a legal document that outlines the terms and conditions agreed upon by individuals who plan to form a corporation in the state of South Carolina. This agreement serves as a roadmap for the formation and early stages of the corporation, ensuring that all parties involved are on the same page. Keywords: South Carolina, preincorporation agreement, incorporates, promoters, corporation, legal document, terms and conditions, formation, early stages. Different types of South Carolina preincorporation agreements between incorporates and promoters may include: 1. Basic Preincorporation Agreement: This is a standard agreement that covers the essential elements required for the formation of a corporation. It typically includes details such as the corporation's name, purpose, registered agent, initial shareholders, and capital contributions. 2. Comprehensive Preincorporation Agreement: This type of agreement goes into greater detail, covering a wide range of aspects related to the corporation's formation. It may include provisions on the appointment of directors and officers, bylaws, rights and obligations of shareholders, voting procedures, and corporate governance issues. 3. Specific Purpose Preincorporation Agreement: In cases where the corporation is formed for a specific purpose or project, this agreement focuses on the unique requirements and considerations of that purpose. It may include provisions relating to partnerships, joint ventures, or specific business objectives. 4. Confidentiality and Non-Disclosure Preincorporation Agreement: This agreement emphasizes the protection of proprietary information and trade secrets during the preincorporation phase. It outlines the responsibilities of the incorporates and promoters to maintain confidentiality and prevent the unauthorized disclosure of sensitive information. 5. Partnership Agreement with Preincorporation Provisions: This type of agreement is relevant when the incorporates and promoters intend to form a partnership before incorporating a corporation. It establishes the terms and conditions of the partnership, including profit sharing, management roles, dissolution procedures, and the subsequent transition to a corporation. 6. Joint Ventures Preincorporation Agreement: In situations where multiple parties collaborate on a business endeavor, a joint ventures preincorporation agreement is used. This agreement outlines the terms and conditions of the joint venture, including the contributions, profit sharing, decision-making processes, and exit strategies. It is important to consult with a legal professional specializing in corporate law to ensure that the specific requirements of South Carolina law are met when drafting a preincorporation agreement between incorporates and promoters.
