• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

pre-incorporation agreement

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.


New member
I want to make a pre-incorporation agreement to give a certain percentage of the corporation share to a person after incorporation. Will a paper agreement do without any lawyer? I am in Nigeria and the said person is in Turkey.
Last edited:


Senior Member
While any competent adult can make almost any agreement (other than one for an illegal purpose) with any other competent adult or entity, with or without a lawyer, whether or not one should is a totally separate matter.

A pre-incorporation agreement sounds as if it would be good to have, and it would be a lot more clear than an oral understanding. Yet if the business venture is going to grow and prosper to be something worthwhile -- or on the other hand if it fails and creditors start to come after the principals -- it's likely that self drawn agreement will, with the benefit of hindsight, have so many holes in it that the resulting litigation likely would could cost multiple times what it would have cost to have had a lawyer prepare -- or at least review -- the agreement in the first place.

Taxing Matters

Overtaxed Member
It will conduct business everywhere in the world.
If that is the case then you probably want the corporation organized someplace outside the U.S. Having the corporation located in the U.S. when the owners are not U.S. citizens or residents is generally not a good idea because the U.S. taxes its corporations, citizens, and residents on their worldwide income, unlike many other nations. So if you form this corporation in the U.S. and it conducts business world wide the U.S. will tax all that world wide income. If the corporation is organized in some other country then the U.S. will only tax the income that corporation makes from the U.S., though there still can be challenges operating in branch form in the U.S. You may want to have the corporation (the parent corporation) organized in some other country and then have that parent corporation form a subsidiary corporation in the U.S. just to do only the U.S. business operations. That would confine the U.S. tax to the income from the U.S. operations. The details of the kind of business this is would of course impact the exact structure that would be optimal to use.

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential