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 San Jose California Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions for establishing a corporation in the city of San Jose, California. This agreement is crucial for ensuring a smooth and organized process of incorporation. The main purpose of this agreement is to define the roles, responsibilities, and obligations of both the incorporates and promoters involved in forming the corporation. It establishes a clear framework and sets forth the terms on which the corporation will be established. Some key elements typically included in the San Jose California Preincorporation Agreement between Incorporates and Promoters are as follows: 1. Identifying Information: The agreement starts by providing the names, addresses, and contact information of all the parties involved, including the incorporates and promoters. 2. Purpose of the Corporation: It outlines the specific business or activities that the corporation will engage in. The purpose statement should be concise and accurately define the nature of the corporation's operations. 3. Capital Structure: This section defines the authorized capital stock and details the number of shares, their par value, and any special rights or privileges associated with different classes of shares. 4. Incorporates' Contributions: It specifies the contributions, such as cash, property, or services, that each incorporated will make to the corporation in exchange for their shares. 5. Promoter's Role and Compensation: It outlines the responsibilities of the promoter in facilitating the incorporation process, including drafting and filing the necessary documents. The agreement also covers the compensation that the promoter will receive, which can be in the form of cash, shares, or a combination of both. 6. Confidentiality and Non-disclosure: This clause ensures that any confidential information shared during the incorporation process remains confidential and cannot be disclosed to unauthorized parties. 7. Governing Law: The agreement typically specifies that it will be governed by and construed under the laws of the state of California and any relevant federal laws. Different variations of the San Jose California Preincorporation Agreement between Incorporates and Promoters may exist, tailored to specific industries or circumstances. For example, there may be unique agreements for technology startups, nonprofit corporations, or joint venture incorporation. However, the essential elements mentioned above are commonly included in most agreements. It is essential to consult with a legal professional or attorney specializing in corporate law to ensure that the agreement is drafted accurately and complies with all legal requirements.The San Jose California Preincorporation Agreement between Incorporates and Promoters is a legal document that outlines the terms and conditions for establishing a corporation in the city of San Jose, California. This agreement is crucial for ensuring a smooth and organized process of incorporation. The main purpose of this agreement is to define the roles, responsibilities, and obligations of both the incorporates and promoters involved in forming the corporation. It establishes a clear framework and sets forth the terms on which the corporation will be established. Some key elements typically included in the San Jose California Preincorporation Agreement between Incorporates and Promoters are as follows: 1. Identifying Information: The agreement starts by providing the names, addresses, and contact information of all the parties involved, including the incorporates and promoters. 2. Purpose of the Corporation: It outlines the specific business or activities that the corporation will engage in. The purpose statement should be concise and accurately define the nature of the corporation's operations. 3. Capital Structure: This section defines the authorized capital stock and details the number of shares, their par value, and any special rights or privileges associated with different classes of shares. 4. Incorporates' Contributions: It specifies the contributions, such as cash, property, or services, that each incorporated will make to the corporation in exchange for their shares. 5. Promoter's Role and Compensation: It outlines the responsibilities of the promoter in facilitating the incorporation process, including drafting and filing the necessary documents. The agreement also covers the compensation that the promoter will receive, which can be in the form of cash, shares, or a combination of both. 6. Confidentiality and Non-disclosure: This clause ensures that any confidential information shared during the incorporation process remains confidential and cannot be disclosed to unauthorized parties. 7. Governing Law: The agreement typically specifies that it will be governed by and construed under the laws of the state of California and any relevant federal laws. Different variations of the San Jose California Preincorporation Agreement between Incorporates and Promoters may exist, tailored to specific industries or circumstances. For example, there may be unique agreements for technology startups, nonprofit corporations, or joint venture incorporation. However, the essential elements mentioned above are commonly included in most agreements. It is essential to consult with a legal professional or attorney specializing in corporate law to ensure that the agreement is drafted accurately and complies with all legal requirements.
