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 Washington Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions agreed upon between the individuals or entities involved in the process of incorporating a company in Washington state. This agreement serves as a contract between the incorporates and promoters, establishing their rights, obligations, and responsibilities before the actual formation of the corporation takes place. It serves to protect the interests of all parties involved and provides clarity on various aspects of the incorporation process. Keywords: Washington Preincorporation Agreement, Incorporates, Promoters, legal document, terms and conditions, incorporating a company, Washington state, rights, obligations, responsibilities, corporation formation, parties, interests, clarity, incorporation process. In Washington, there may be different types of Preincorporation Agreements between Incorporates and Promoters, depending on the specific needs and circumstances of the business. Here are a few examples: 1. Equity Allocation Agreement: This type of agreement outlines how the equity or ownership in the company will be allocated among the incorporates and promoters. It specifies the percentage of ownership, voting rights, and any conditions or restrictions associated with each party's equity stake. 2. Capital Contribution Agreement: A Capital Contribution Agreement addresses the financial contributions made by incorporates and promoters towards the initial capital requirements of the corporation. It details the amount and timing of the contributions, the consequences of failure to contribute, and any arrangements for repayment or redistribution of funds. 3. Roles and Responsibilities Agreement: This agreement defines the roles, responsibilities, and authority of each incorporated and promoter during the preincorporation phase. It may outline specific tasks or duties to be undertaken by each party and establish mechanisms for resolving disputes or conflicts that may arise. 4. Confidentiality and Non-disclosure Agreement: As the preincorporation phase involves sharing sensitive business information, a Confidentiality and Non-disclosure Agreement ensures that all involved parties maintain strict confidentiality and do not disclose or misuse any proprietary or confidential information shared during the incorporation process. 5. Intellectual Property Assignment Agreement: If there are intellectual property assets involved, such as patents, trademarks, or copyrights, an Intellectual Property Assignment Agreement may be necessary. This agreement establishes the transfer of ownership rights from the incorporates and promoters to the newly formed corporation. It is important to consult with a qualified attorney or legal professional experienced in Washington state laws to ensure that the chosen Preincorporation Agreement is appropriate, valid, and customized to meet the specific needs of the business.
