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 Chicago Illinois Preincorporation Agreement between Incorporates and Promoters is a legally binding document that outlines the terms and conditions agreed upon by the incorporates and promoters before the formal incorporation of a business or organization in the city of Chicago, Illinois. This agreement serves as a crucial step in the preincorporation process to ensure a smooth transition into the formal establishment of the entity. The Chicago Illinois Preincorporation Agreement between Incorporates and Promoters typically includes several key elements. Firstly, it identifies the parties involved, specifically the incorporates and promoters, by providing their names, addresses, and contact information. Secondly, the agreement outlines the purpose and objectives of the forthcoming business or organization. It emphasizes the need for clarity on the primary goals, services, or products offered by the entity, ensuring that all parties are aligned in their understanding and commitment. Furthermore, this agreement details the initial capital contribution required from each incorporated, which delineates the financial commitment of each party and helps determine their respective ownership stakes within the future entity. Additionally, the Chicago Illinois Preincorporation Agreement discusses the roles and responsibilities of each party involved, addressing areas such as management, decision-making processes, and the division of profits and losses. It helps establish a clear organizational structure and ensures that all parties are aware of their rights and obligations. Moreover, the agreement covers the timeline and processes required to complete the formal incorporation, including the necessary documentation, permits, or licenses, and any other procedural requirements mandated by Chicago, Illinois state or federal laws. While there may not be specific types of Chicago Illinois Preincorporation Agreements between Incorporates and Promoters, the content and clauses within the agreement can be customized to suit the unique needs and circumstances of different businesses or organizations. Therefore, multiple agreements may exist depending on the specific requirements of each entity. In conclusion, a Chicago Illinois Preincorporation Agreement between Incorporates and Promoters is a crucial document that establishes the foundation for the formal incorporation of a business or organization in the city of Chicago, Illinois. By addressing key elements such as parties involved, objectives, capital contributions, roles and responsibilities, and procedural requirements, this agreement ensures that all incorporates and promoters are aligned and committed to the successful establishment of the entity.A Chicago Illinois Preincorporation Agreement between Incorporates and Promoters is a legally binding document that outlines the terms and conditions agreed upon by the incorporates and promoters before the formal incorporation of a business or organization in the city of Chicago, Illinois. This agreement serves as a crucial step in the preincorporation process to ensure a smooth transition into the formal establishment of the entity. The Chicago Illinois Preincorporation Agreement between Incorporates and Promoters typically includes several key elements. Firstly, it identifies the parties involved, specifically the incorporates and promoters, by providing their names, addresses, and contact information. Secondly, the agreement outlines the purpose and objectives of the forthcoming business or organization. It emphasizes the need for clarity on the primary goals, services, or products offered by the entity, ensuring that all parties are aligned in their understanding and commitment. Furthermore, this agreement details the initial capital contribution required from each incorporated, which delineates the financial commitment of each party and helps determine their respective ownership stakes within the future entity. Additionally, the Chicago Illinois Preincorporation Agreement discusses the roles and responsibilities of each party involved, addressing areas such as management, decision-making processes, and the division of profits and losses. It helps establish a clear organizational structure and ensures that all parties are aware of their rights and obligations. Moreover, the agreement covers the timeline and processes required to complete the formal incorporation, including the necessary documentation, permits, or licenses, and any other procedural requirements mandated by Chicago, Illinois state or federal laws. While there may not be specific types of Chicago Illinois Preincorporation Agreements between Incorporates and Promoters, the content and clauses within the agreement can be customized to suit the unique needs and circumstances of different businesses or organizations. Therefore, multiple agreements may exist depending on the specific requirements of each entity. In conclusion, a Chicago Illinois Preincorporation Agreement between Incorporates and Promoters is a crucial document that establishes the foundation for the formal incorporation of a business or organization in the city of Chicago, Illinois. By addressing key elements such as parties involved, objectives, capital contributions, roles and responsibilities, and procedural requirements, this agreement ensures that all incorporates and promoters are aligned and committed to the successful establishment of the entity.
