A preorganization certificate is an agreement to purchase securities prior to the formation of a corporation. The offer or sale of the certificate is exempt if no commission was received for soliciting the sale. The number of subscribers may not exceed 10, and the subscriber may not make any payments.

Is a Preorganization subscription A security?

(10) The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or ...

What defines a security SEC?

Definition of Security

Rep. No. 85, 73d Cong., 1st Sess., 11 (1933)). Clearly though the offer and sale of stock, bonds, debentures, ownership interests in limited liability companies and most notes with a maturity date over nine months are considered “securities” (Section 3(a)(3) of the Securities Act).