From a business law book:

"Promoters are those who, for themselves or others, take the preliminary steps in organizing a corporation. The promoter also secures the corporate charter.

Promoter's Liability. A promoter may purchase or lease property with a view toward selling it to the corporation when the corporation is formed. In addition, a promoter may enter into contracts with attorneys, accountants, architects, and other professionals whose services will be needed in planning for the proposed corporation. Finally, a promoter induces people to purchase stock in the corporation.

As a general rule, a promoter is held personally liable on preincorporation contracts. Courts simply hold that promoters are not agents when a corporation has yet to come into existence. If, however, the promoter secures the contracting party's agreement to hold only the corporation (not the promoter) liable on the contract, the promoter will not be liable in the event of any breach of contract.

Once the corporation is formed (the charter issued), the promoter remains personally liable until the corporation assumes the preincorporation contract by novation. Novation releases the promoter and makes the corporation liable for performing the contractual obligations. In some cases, the corporation adopts the promoter's contract by undertaking to perform it. Most courts hold that adoption in and of itself does not discharge the promoter from contractual liability. A corporation cannot ratify a preincorporation contract, as no principal was in existence at the time the contract was made."

For more about promoters, read: http://www.nevadafirst.com/Part4.html See also "Functions of a Promoter".

Audax WWNetwork Corporation is the promoter for the creation of OFI Bank. There are no OFI Bank directors as of now, because OFI Bank is non-existent.

The promoter will be compensated by the newly created or the merged company by shares. When the newly created company becomes a registered corporation, the promoter usuallly earns some seats in the board of the directors, considering all the expenses it had incurred PLUS the VALUE it has created, i.e. increase in demand and goodwill, speculation. In other words, Audax shares will be of much greater value than when it started as seed money (and rightfully so, because of the high risk involved.)

FORMATION OF A CORPORATION

1. A Promoter
2. Preincorporation Activities
3. The Process of Incorporation
4. Defects in the Formation Process
5. Piercing the Corporate Veil
6. Jurisdiction and Service of Process

1. A PROMOTER

   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.

2. PREINCORPORATION ACTIVITIES

   The process of organizing a corporation begins with promotion of the proposed corporation by its organizers.

   1. The promoter is the driving force behind formation of the corporation.
      
      1. The promoter is a planner that arranges for the capital structure and financing of the corporation. The promoter may also arrange for procurement of necessary
         
         1. Personal
         2. Services
         3. Assets
         4. Licences
         5. Equipment
         6. Leases etc.
      2. Promoters actually set into motion integration of the foundational elements of the corporation
         
         1. They seek business opportunities.
         2. They raise capital.
            
            1. They find investors and encourage them to enter into stock subscription agreements.
         3. They enter into contracts on behalf of the corporation to be formed.
         4. They cause the articles of incorporation to be prepared, in which process they
            
            1. Select the state of incorporation
            2. Select a corporate name
            3. Plan special charter provisions to be included
      3. Upon incorporation, the promoter's task is complete.
      4. Prior to actual incorporation, the promoter usually enters into ordinary and necessary contracts required for initial operation of the business.
      5. If these 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.
         
         1. A preincorporation contract made by promoters in the name of a corporation and on its behalf does not bind the corporation, except if so provided by statute.
         2. Promoters may execute a contract in the name of the corporation, but, prior to its formation, a corporation has no capacity to enter into contracts or to employ agents or representatives.
         3. Ratification refers to a principal agreeing to be bound by the act(s) of its agent beyond the authority of the agent. Refer to Chapter 29, Agency.
            
            1. Technically, promoters cannot be agents of a not-yet-existing corporation (principal); therefore the corporation, once formed, is unable to ratify contracts entered into by the promoter(s).
         4. The corporation may adopt contracts formed by a promoter.
            
            1. Adoption is essentially acceptance of assignment of rights and delegation of duties. Refer to Chapter 12, Contracts: Third-Party Rights and Duties.
            2. If the corporation accepts the benefits of a contract, adoption may be implied.
            3. The contract, by its terms, may provide that the promoter is released from liability upon adoption by the corporation.
         5. A promoter may avoid liability by acquiring an option (assignable to the corporation) to bind the third party to a contract
            1. For valuable consideration, an option is essentially an offer irrevocable for a stated period (sufficient to permit incorporation, assignment, and exercise).
         6. If the promoter has no liability by the terms of an agreement, and it is not an option, it may be treated as a continuing offer until revoked or accepted by the corporation.
            
            1. A novation is the substitution of a party for one of the original parties to a contract with the consent of the remaining party. The result is that the old contract is extinguished, and a new contract, with the same content but with a different party, is formed.
      6. A fiduciary duty requires good faith, fair dealing, and full disclosure of all material facts by the promoter concerning transactions (s)he makes on behalf of the soon-to-be-formed corporation.
         
         1. Promoters owe a fiduciary duty
            
            1. To each other To each other
            2. To the corporation
            3. To subscribers, who agree to purchase the initial offering of stock, and shareholders
         2. Disclosure is made to the board of directors.
            
            1. If an independent board of directors has not been elected, full disclosure of all dealings with respect to the corporation must be made by the promoter to all shareholders.
            2. To the corporation
               
               1. Typically, the duty of disclosure arises when a promoter sells or exchanges his/her own property to the corporation.
      7. Part of a promoter's duty is recruitment of investors in the soon-to-be-formed corporation.
         
         1. The promoter secures potential investors, using stock subscription agreements