Each state in the union has its own law that covers how a business organization is to be formed. While there are variations in each state, which should be discussed with us before you file, for the most part each state requires one or more of the following to be filed with the secretary of state for each state:
a. The filing of “Articles of Incorporation”. This is a form that these days can be completed on-line. Usually it asks the following questions:
i. Name of the new corporation;
iii. Telephone number (in some states);
iv. The name and address of the “registered agent”. The registered agent is the person or business in that state that is authorized to accept personal service of legal notices on behalf of the business entity. Such notices may be something simple like a change in filing requirements, or it may be something more complex like pleadings in a law suit that someone has filed against the business. There are companies that make a living acting as the registered agent for corporations so the fact that you don’t live in a certain state should not dissuade you for filing in that state.
v. The types of shares that will be issued (e.g. “common stock”; “preferred stock”; “Class A”; etc)
vi. The number of shares that the corporation is authorized to issue. Though this may be a figure like 100,000 shares, remember that the corporation is not required to issue all of those shares. So if there are 3 shareholders each of who owns only 1 share, each such shareholder owns 33.33% of the corporation as though each was issued 333,333 shares.
vii. The “par value” (which is the value that the corporation assigns to each initial share of stock). While par value can be huge ($100,000 per share), virtually all startups declare that the shares have no par value at all. This is advantageous for many reasons.
viii. The names and addresses of the initial members of the board of directors (in some states);
ix. The names and addresses of the initial officers (in some states);
x. The names and addresses of the initial shareholders (in some states);
xi. The name and address of the “incorporator” (who is the person that is starting the corporation);
xii. The name and address of the person physically filing the document (which need not be the incorporator);
xiii. The right to attached to the filing any additional information that the filing person may want to add.
The next step is to create and draft the “bylaws” which is the roadv map to the operation of the business. This is a complex document that requires the input of your attorney. Let the attorneys at Corporon & Katz help you select the right business entity for you. We charge a flat fee for most of our business start up procedures and also free consultations!