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 Tennessee Preincorporation Agreement between Incorporates and Promoters is a legally binding contract that outlines the terms and conditions agreed upon by individuals or entities involved in the formation of a corporation in the state of Tennessee before it is officially incorporated. This agreement serves as a vital document that governs the relationship, responsibilities, and rights of the incorporates and promoters during the preincorporation phase. Keywords: Tennessee, Preincorporation Agreement, Incorporates, Promoters, corporation, legally binding, terms and conditions, formation, relationship, responsibilities, rights, preincorporation phase. Different types of Tennessee Preincorporation Agreement between Incorporates and Promoters include: 1. Basic Preincorporation Agreement: This type of agreement is a simplified version that covers the fundamental aspects agreed upon by the incorporates and promoters. It typically includes clauses such as the purpose of the corporation, initial capital contributions, distribution of profits, management structure, and other essential provisions. 2. Comprehensive Preincorporation Agreement: This agreement is a more detailed and extensive version that includes additional provisions and clauses specific to the needs and requirements of the incorporates and promoters. It may have comprehensive sections on shareholder rights and obligations, intellectual property ownership, non-disclosure agreements, dispute resolution mechanisms, and other relevant topics. 3. Preincorporation Agreement with Promissory Notes: In certain instances, the incorporates or promoters may agree to include promissory notes within the preincorporation agreement. This type of agreement includes provisions related to the terms, conditions, and repayment schedule of any loans or financial assistance provided by the promoters to the corporation during the preincorporation phase. 4. Joint Venture Preincorporation Agreement: In cases where multiple parties are involved in the formation of the corporation, a joint venture preincorporation agreement may be used. This agreement outlines the terms and conditions specific to the collaborative effort, profit-sharing arrangements, contribution of resources, and other aspects of the joint venture. 5. Preincorporation Agreement with Intellectual Property Assignment: In situations where intellectual property is a crucial asset of the future corporation, a preincorporation agreement may include provisions for the assignment or licensing of intellectual property rights from the promoters to the corporation. This type of agreement protects the interests of both parties while ensuring a smooth transition of intellectual property rights. In summary, a Tennessee Preincorporation Agreement between Incorporates and Promoters is a contractual document that facilitates the formation of a corporation in the state of Tennessee. It sets out the rights, responsibilities, and obligations of the parties involved and can vary in complexity and specific provisions based on the needs and circumstances of the business venture.A Tennessee Preincorporation Agreement between Incorporates and Promoters is a legally binding contract that outlines the terms and conditions agreed upon by individuals or entities involved in the formation of a corporation in the state of Tennessee before it is officially incorporated. This agreement serves as a vital document that governs the relationship, responsibilities, and rights of the incorporates and promoters during the preincorporation phase. Keywords: Tennessee, Preincorporation Agreement, Incorporates, Promoters, corporation, legally binding, terms and conditions, formation, relationship, responsibilities, rights, preincorporation phase. Different types of Tennessee Preincorporation Agreement between Incorporates and Promoters include: 1. Basic Preincorporation Agreement: This type of agreement is a simplified version that covers the fundamental aspects agreed upon by the incorporates and promoters. It typically includes clauses such as the purpose of the corporation, initial capital contributions, distribution of profits, management structure, and other essential provisions. 2. Comprehensive Preincorporation Agreement: This agreement is a more detailed and extensive version that includes additional provisions and clauses specific to the needs and requirements of the incorporates and promoters. It may have comprehensive sections on shareholder rights and obligations, intellectual property ownership, non-disclosure agreements, dispute resolution mechanisms, and other relevant topics. 3. Preincorporation Agreement with Promissory Notes: In certain instances, the incorporates or promoters may agree to include promissory notes within the preincorporation agreement. This type of agreement includes provisions related to the terms, conditions, and repayment schedule of any loans or financial assistance provided by the promoters to the corporation during the preincorporation phase. 4. Joint Venture Preincorporation Agreement: In cases where multiple parties are involved in the formation of the corporation, a joint venture preincorporation agreement may be used. This agreement outlines the terms and conditions specific to the collaborative effort, profit-sharing arrangements, contribution of resources, and other aspects of the joint venture. 5. Preincorporation Agreement with Intellectual Property Assignment: In situations where intellectual property is a crucial asset of the future corporation, a preincorporation agreement may include provisions for the assignment or licensing of intellectual property rights from the promoters to the corporation. This type of agreement protects the interests of both parties while ensuring a smooth transition of intellectual property rights. In summary, a Tennessee Preincorporation Agreement between Incorporates and Promoters is a contractual document that facilitates the formation of a corporation in the state of Tennessee. It sets out the rights, responsibilities, and obligations of the parties involved and can vary in complexity and specific provisions based on the needs and circumstances of the business venture.
