Promotional Stock

Definition - What does Promotional Stock mean?

Promotional stock is a special stock issued by a newly formed company. These stocks are usually given to organizers that have been responsible for promoting the newly formed corporation. These stocks are also given to promoters on behalf of their efforts in promoting the company and putting together shareholders and more funding.

Justipedia explains Promotional Stock

Federal securities and exchange acts in most states limit the amount of promotional stock to a level where it is considered a “reasonable” amount against the effort of the promoter in promoting the new company, since the promotional stock is not backed by money or assets.

Connect with us

Justipedia on Linkedin
Justipedia on Linkedin
"Justipedia" on Twitter

Sign up for Justipedia's Free Newsletter!