Pre-Incorporation Agreements provide a means to specify the terms of the agreement between the persons forming a corporation before you incorporate to make everything clear. Sample previews are available for each state.
Why You Need a Pre-Incorporation Agreement
A pre-incorporation agreement is essential to establish the management, control, and operation of the business during the pre-incorporation process. A pre-incorporation agreement can avoid future disputes by having an agreement on important terms at the beginning of incorporation, before later efforts complicate matters. Often, shareholders agreements and confidentiality agreements are created at the same time. US Legal Forms offers form packages that include a pre-incorporation agreement, shareholder agreements, and confidentiality agreements at a substantial discount, as well as incorporation forms and agreement forms that are available separately.
What is a Pre-Incorporation Agreement?
A pre-incorporation agreement is one of the legal forms used at the outset of the incorporation process. By using a pre-incorporation agreement, you are ensuring that everyone involved in forming the business has a clear understanding of the plans, thereby minimizing the chance for future disputes and litigation. A date for completing the formation of a corporation and provisions for handling the costs and expenses of incorporation are dealt with in the pre-incorporation forms. The forms lay out the basic organization of the business, its business name, business purpose, agreed upon directors and officers and their salaries, capital contributions, etc. The following are some of the basic terms included in pre-incorporation agreements:
- The corporate name that will be registered for the corporation.
- A statement of business purpose for forming a corporation.
- A date for completion of corporate formation.
- The address of the corporate headquarters that will be used in the articles of incorporation.
- Any chosen officers or directors.
- Capital contributions by initial shareholders.
- Terms for establishment of a corporate bank account and authority for signing corporate checks.
- Authority for carrying out business operations such as signing contracts and borrowing on behalf of the corporation.
- Reimbursement of shareholder fees and expenses for handling incorporation and corporate matters.
- Ratification of transactions over certain dollar amounts.
Other Important Business Forms Included in the Package
Included with the pre-incorporation agreement are a shareholders agreement and confidentiality agreement. The following is an explanation of the importance of the shareholders' agreement and confidentiality agreement:
- Shareholder Agreements - This form is used to establish what happens upon the transfer of a shareholder's shares upon sale, death, bankruptcy, etc. There are provisions in the shareholders agreement for the corporation to have an option to purchase shares at an agreed upon value. A shareholders' agreement is used to prevent corporate control from being transferred to undesired shareholders and ensure smooth transition of ownership if a member of the business leaves or dies.
- Confidentiality Agreement - The confidentiality agreement protects corporate interests by preventing disclosure of customer lists, trade secrets, processes, design, sales, product and marketing information, and whatever else your company agrees to protect from disclosure. Confidentiality agreements forms are used to ensure confidentiality of valuable corporate information and prevent it from being used to advantage your competition or damage the goodwill or profitability of the corporation.
Pre-incorporation agreement packages, with shareholders agreements and confidentiality agreement templates included, are the best way to ensure that future disputes and litigation are avoided during the incorporation process and beyond. The form packages offered by US Legal Forms are professionally drafted by attorneys and our business form templates can be modified in Word to suit your needs if desired.