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.
The Wyoming Preincorporation Agreement between Incorporates and Promoters is a legal document used in the state of Wyoming to outline the terms and conditions of a business arrangement before formally incorporating a company. This agreement establishes the understanding between the incorporates and promoters, defining their roles, responsibilities, and contributions to the proposed corporation. In this agreement, the incorporates are the individuals who have the intention to form a corporation, and the promoters are those who actively work towards the incorporation process, such as securing financing, identifying business opportunities, and organizing necessary documents. The Wyoming Preincorporation Agreement typically contains the following key provisions: 1. Incorporates and Promoters: This section lists the names, addresses, and contact information of all incorporates and promoters involved in the agreement. It clarifies the distinction between these two parties. 2. Purpose of the Agreement: Describes the specific objectives, goals, and purposes for which the agreement is being established. It outlines the intended activities of the future corporation. 3. Contributions and Responsibilities: Details the contributions, responsibilities, and obligations of the incorporates and promoters. This section may cover financial investments, intellectual property ownership, labor contributions, or any other resources deemed necessary for the corporation's formation. 4. Equity and Ownership: Addresses the allocation of shares or ownership interests in the proposed corporation. It specifies how shares will be divided among the incorporates and promoters, and any conditions or restrictions on their transfer or sale. 5. Confidentiality and Non-Compete: Ensures the confidentiality of proprietary information shared among the incorporates and promoters during the preincorporation stage. It may also include provisions that restrict the parties from engaging in similar business activities that could compete with the proposed corporation. 6. Expenses and Reimbursement: Outlines the expenses associated with incorporating the business, such as legal fees, filing costs, and other related expenses. It establishes how these costs will be shared among the parties and provides a mechanism for reimbursement. 7. Governing Law and Dispute Resolution: Specifies that the agreement is governed by Wyoming state laws. It also determines the mechanism for resolving any potential disputes, such as negotiation, mediation, or arbitration. It's worth noting that while there might not be different "types" of Wyoming Preincorporation Agreement between Incorporates and Promoters, the specific terms and clauses may vary depending on the nature of the business, the goals of the incorporates, and the complexity of the agreement. Overall, the Wyoming Preincorporation Agreement between Incorporates and Promoters serves as a crucial legal framework that ensures a clear understanding and agreement between the parties involved in incorporating a new business entity in Wyoming. It provides a roadmap for decision-making, rights, and obligations before the formal formation of the corporation.
