promotional stock
Shares issued by a newly formed corporation to a promoter (organizer) of the corporation in payment for putting the company together and locating shareholders or other funding. Some states limit the amount of promotional stock the promoter can receive to an amount reasonable for the effort, since it is supported by labor alone and not by assets or cash.
Category: Business, LLCs & Corporations → LLCs, Corporations, Partnerships, etc.

Nolo’s Plain-English Law Dictionary. . 2009.

promotional stock
n.
   stock issued in a newly formed corporation and given to a promoter (organizer) of the corporation in payment for his/her efforts in putting the company together and locating shareholders or other funding. Most states (and the federal Securities and Exchange Act) limit promotional stock to an amount reasonable for the effort since it is not backed by assets or money.
   See also: promoter

Law dictionary. . 2013.

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