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 Utah Preincorporation Agreement between Incorporates and Promoters is a legally binding contract that outlines the terms and conditions agreed upon by individuals involved in the process of incorporating a business in the state of Utah. It serves as a crucial document in establishing the initial framework and responsibilities of the incorporates and promoters. In this agreement, the incorporates, who are individuals or entities initiating the process of forming a corporation, and the promoters, who are individuals or organizations responsible for securing investments and organizing the business venture, come together to outline their roles, rights, and obligations before the actual incorporation takes place. Some key elements typically included in a Utah Preincorporation Agreement are: 1. Identification of Parties: The agreement clearly identifies the incorporates and promoters involved, detailing their full legal names, addresses, and contact information. 2. Purpose of Incorporation: The agreement outlines the specific purpose of the intended corporation, be it a for-profit or non-profit entity. It may include the industry or sector the business aims to operate in. 3. Capital Contributions: This section specifies the initial capital contributions made by the incorporates and promoters. It outlines the amount of money, property, or other assets each party agrees to contribute towards the formation of the corporation. 4. Ownership and Equity: The agreement outlines the ownership structure of the corporation, including the percentage of equity each incorporated and promoter holds. It may also cover details regarding the distribution of profits and losses. 5. Appointment of Directors and Officers: This section highlights the process by which directors and officers of the corporation will be appointed. It may include the number of directors, their qualifications, and the rights and responsibilities associated with such positions. 6. Confidentiality and Non-Compete: To protect the interests of the corporation, this clause establishes confidentiality provisions regarding proprietary information and trade secrets. It may also include a non-compete agreement, limiting the ability of the incorporates and promoters to engage in similar businesses during and after the formation process. 7. Governing Law: The agreement specifies that it will be governed by the laws of the state of Utah, ensuring compliance with the appropriate legal statutes and guidelines. Different types of Utah Preincorporation Agreements between Incorporates and Promoters may exist, tailored to the specific needs and circumstances of the parties involved. These variations can arise depending on the complexity of the business venture, the industry it operates in, or the preferences of the incorporates and promoters. However, the general purpose of such agreements remains consistent — to establish a solid foundation for the successful incorporation and operation of a business entity in Utah.A Utah Preincorporation Agreement between Incorporates and Promoters is a legally binding contract that outlines the terms and conditions agreed upon by individuals involved in the process of incorporating a business in the state of Utah. It serves as a crucial document in establishing the initial framework and responsibilities of the incorporates and promoters. In this agreement, the incorporates, who are individuals or entities initiating the process of forming a corporation, and the promoters, who are individuals or organizations responsible for securing investments and organizing the business venture, come together to outline their roles, rights, and obligations before the actual incorporation takes place. Some key elements typically included in a Utah Preincorporation Agreement are: 1. Identification of Parties: The agreement clearly identifies the incorporates and promoters involved, detailing their full legal names, addresses, and contact information. 2. Purpose of Incorporation: The agreement outlines the specific purpose of the intended corporation, be it a for-profit or non-profit entity. It may include the industry or sector the business aims to operate in. 3. Capital Contributions: This section specifies the initial capital contributions made by the incorporates and promoters. It outlines the amount of money, property, or other assets each party agrees to contribute towards the formation of the corporation. 4. Ownership and Equity: The agreement outlines the ownership structure of the corporation, including the percentage of equity each incorporated and promoter holds. It may also cover details regarding the distribution of profits and losses. 5. Appointment of Directors and Officers: This section highlights the process by which directors and officers of the corporation will be appointed. It may include the number of directors, their qualifications, and the rights and responsibilities associated with such positions. 6. Confidentiality and Non-Compete: To protect the interests of the corporation, this clause establishes confidentiality provisions regarding proprietary information and trade secrets. It may also include a non-compete agreement, limiting the ability of the incorporates and promoters to engage in similar businesses during and after the formation process. 7. Governing Law: The agreement specifies that it will be governed by the laws of the state of Utah, ensuring compliance with the appropriate legal statutes and guidelines. Different types of Utah Preincorporation Agreements between Incorporates and Promoters may exist, tailored to the specific needs and circumstances of the parties involved. These variations can arise depending on the complexity of the business venture, the industry it operates in, or the preferences of the incorporates and promoters. However, the general purpose of such agreements remains consistent — to establish a solid foundation for the successful incorporation and operation of a business entity in Utah.
