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 San Diego California Preincorporation Agreement between Incorporates and Promoters is a legally binding document that outlines the terms and conditions agreed upon by individuals or entities involved in the process of forming a corporation in the city of San Diego, California. This agreement establishes the rights, responsibilities, and obligations of both the incorporates and the promoters, ensuring a smooth and coordinated effort in incorporating the business. Keywords: San Diego California, Preincorporation Agreement, Incorporates, Promoters There are several types of San Diego California Preincorporation Agreements between Incorporates and Promoters, each serving different purposes and addressing specific considerations. Some of these types include: 1. Standard Preincorporation Agreement: This is the most common form of agreement that sets out the general terms of cooperation and collaboration between incorporates and promoters. It includes clauses related to the purpose of incorporation, division of responsibilities, capital contributions, and profit sharing. 2. Intellectual Property Preincorporation Agreement: In cases where the corporation involves the transfer or licensing of intellectual property, this agreement specifies the terms and conditions related to the use, ownership, and protection of such assets. It may include provisions for royalties, exclusivity, or restrictions on the transfer of intellectual property rights. 3. Financial Preincorporation Agreement: When financial matters such as investment capital, shares allocation, and fundraising activities are crucial, this type of agreement focuses on financial aspects of the incorporation process. It outlines the specific financial obligations of each party and governs the distribution of proceeds from the business operations. 4. Non-Compete and Confidentiality Preincorporation Agreement: In situations where incorporates and promoters have previous or existing business interests, this agreement ensures that they do not engage in activities that compete with the future corporation or disclose confidential information. It includes non-compete clauses, non-disclosure provisions, and penalties for breaches of confidentiality. 5. Joint Venture Preincorporation Agreement: In instances where multiple parties collaborate to form a corporation, this agreement details the establishment and operation of a joint venture. It may cover topics such as decision-making, profit sharing, management structure, and duration of the joint venture. Overall, a San Diego California Preincorporation Agreement between Incorporates and Promoters plays a vital role in clarifying the expectations and responsibilities of all parties involved in the incorporation process. It ensures a transparent and fair collaboration, safeguarding the rights and interests of the incorporates and promoters.A San Diego California Preincorporation Agreement between Incorporates and Promoters is a legally binding document that outlines the terms and conditions agreed upon by individuals or entities involved in the process of forming a corporation in the city of San Diego, California. This agreement establishes the rights, responsibilities, and obligations of both the incorporates and the promoters, ensuring a smooth and coordinated effort in incorporating the business. Keywords: San Diego California, Preincorporation Agreement, Incorporates, Promoters There are several types of San Diego California Preincorporation Agreements between Incorporates and Promoters, each serving different purposes and addressing specific considerations. Some of these types include: 1. Standard Preincorporation Agreement: This is the most common form of agreement that sets out the general terms of cooperation and collaboration between incorporates and promoters. It includes clauses related to the purpose of incorporation, division of responsibilities, capital contributions, and profit sharing. 2. Intellectual Property Preincorporation Agreement: In cases where the corporation involves the transfer or licensing of intellectual property, this agreement specifies the terms and conditions related to the use, ownership, and protection of such assets. It may include provisions for royalties, exclusivity, or restrictions on the transfer of intellectual property rights. 3. Financial Preincorporation Agreement: When financial matters such as investment capital, shares allocation, and fundraising activities are crucial, this type of agreement focuses on financial aspects of the incorporation process. It outlines the specific financial obligations of each party and governs the distribution of proceeds from the business operations. 4. Non-Compete and Confidentiality Preincorporation Agreement: In situations where incorporates and promoters have previous or existing business interests, this agreement ensures that they do not engage in activities that compete with the future corporation or disclose confidential information. It includes non-compete clauses, non-disclosure provisions, and penalties for breaches of confidentiality. 5. Joint Venture Preincorporation Agreement: In instances where multiple parties collaborate to form a corporation, this agreement details the establishment and operation of a joint venture. It may cover topics such as decision-making, profit sharing, management structure, and duration of the joint venture. Overall, a San Diego California Preincorporation Agreement between Incorporates and Promoters plays a vital role in clarifying the expectations and responsibilities of all parties involved in the incorporation process. It ensures a transparent and fair collaboration, safeguarding the rights and interests of the incorporates and promoters.
