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 Texas Preincorporation Agreement between Incorporates and Promoters is a legally binding document that outlines the terms and conditions between individuals or entities involved in the process of forming a corporation in the state of Texas. This agreement serves as a blueprint for the future corporation and helps establish the foundational framework of its operations. The agreement typically contains key information such as the names and addresses of the incorporates and promoters, the purpose of the corporation, the contributions (assets, cash, or intellectual property rights) to be made by the promoters, and the number of shares each promoter will receive. It also addresses the capital structure, management structure, and decision-making procedures of the future corporation. Furthermore, the Texas Preincorporation Agreement between Incorporates and Promoters may outline the distribution of profits, the resolution of disputes, restrictions on transfer of shares, and the rights and obligations of the incorporates and promoters. Promoters are individuals or entities responsible for actively taking steps to organize and bring the corporation into existence. There is not a specific categorization of different types of Texas Preincorporation Agreements between Incorporates and Promoters as their content typically remains consistent across agreements. However, the agreement may vary depending on the complexity of the corporation being formed, the number of promoters involved, and any specific requirements or preferences of the parties involved. Overall, a Texas Preincorporation Agreement between Incorporates and Promoters serves as a crucial document in establishing the groundwork for the future corporation. It ensures transparency, enables effective decision-making, and helps minimize disputes or misunderstandings during the initial stages of forming a corporation in Texas.
