FAQ: How about an online do it yourself incorporation/LLC?  Sure, those range from $99 (basic docs) to $699 + to cover about 1/2 of the "top 20." Also, you must know the answers.

  • When you engage us, you get guidance answering these questions and comfort knowing you are prepared.  

  • Note: Hiring an attorney to "fix" missed things later can be expensive and problematic.

  • It can be hard to determine all the differences between LLC's and corporations, but this should help.


  • Questions about business types?  Review these points to consider which form might be right for you.         

So, are you prepared?

You need to understand, be prepared and able to clearly address each of these 20 items or you need an attorney.

A new LLC has similar issues and questions to address.

Incorporating? The "Top 20" things to know

11. Founder's Stock Purchase Agreements. In this agreement, founders document their ownership and obligations, including transfer rules and vesting. 

12. Confidentiality and/or Invention Assignment Agreement. Sets rules regarding confidentiality relating to sensitive / proprietary company information and establishes ownership of "work product."

13. Indemnification Agreements. A huge consideration that many do-it-yourself people miss.  A corporation may indemnify anyone (director, officer, employee or agent) acting under the direction of the corporation.  Also, consider directors insurance.

14. Open a Bank Account. Keeping personal assets and expenditures separate from those of the corporation and observing other corporate formalities is critical to minimizing your personal liability.

15. Obtain a corporate kit. A binder with a corporate minute book, corporate seal, stock ledger, and stock certificates is needed. Corporate minutes are key to limited liability, so keep them neat and all in one place.

16. Prepare Stock Certificates. Issue each shareholder the shares they own and define restrictions on transfer. Since this represents ownership in the company, it's really critical to make sure they are correct.

17. Buy-Sell Agreement. This is the pre-nuptial agreement between the company owners and it sets rules if one chooses to leave, is forced to leave, or dies. You should agree on all of these before you need them.

18. Apply for a business license at the applicable state, city or county level. This is required by law. Failure to obtain a license can result in penalties / fraud.

19. Is your business fully compliant?  You may need to address: Workers Compensation, Professional License rules for corporations,
Homeowner Policy rider, Zoning, neighborhood restrictions, City / County Permits, Business / Liability Insurance and other items.

20. Identify professional partners. Tax preparer, Accountant, Insurance Agent, Attorney and mentor.
1. Reserve / Check for your company name with the Secretary of State to prevent extra cost, delay or denial.

2. Determine your registered agent for service of process. One “low cost” online service charges $235 annually for this; however, we handle this for free.

3. Prepare and file Articles of Incorporation. We file these in person for our clients to ensure quick results. Again, an included part of our legal fee.

4. Draft corporate bylaws. Establish rules and structure for your corporation. We prepare these keys to legal compliance with the Articles of Incorporation.

5. Prepare / obtain necessary certificates or certified copies, if you need to do business in another state. Evaluate whether you need a Certificate of Good Standing. With the Patriot Act, this is a heightened concern today.

6. Elect S Corporation status (if applicable). There is limited time to make this election, so we need to timely have a discussion with your accountant / tax advisor.

7. Do you need to file a Fictitious Business Name (aka filing a d/b/a)?  Often you may need to file these in different counties where you plan to do business. Failure to file a fictitious business name prior to conducting business under a name that's different from your corporate name could result in a claim of fraud.

8. Obtain your Employer Identification Number (EIN) from the IRS.  Also, ensure you determine your tax schedule and whether you need to establish an account for employees.  Consider estimated taxes, withholdings and other payment requirements.

9. Initial action by Sole Incorporator. Appoints members of the board of directors to serve until shareholders can officially select them or until directors are otherwise chosen.

10. Written Consent of Board in Lieu of First Meeting. Keys are: initial board resolutions, appointing board of directors, sale of stock to founders and adoption of other necessary resolutions / agreements / decisions. 

Need to start a new corporation, LLC or partnership?  We can help.

I want limited liability!

The most popular reason a person seeks to form a Corporation or LLC is to gain limited liability protection of their personal assets.  While this is a great idea and planning tool, like other tools - you must use it correctly or it will not help you.  

To maintain limited liability, you must:

  1. Avoid personally or directly injuring another.

  2. Avoid guarantees on a bank loan or other business related debt for the LLC or Corporation.

  3. Properly deposit taxes withheld from employees.

  4. Never intentionally do something fraudulent, reckless or illegal that might harm someone else or the company.

  5. Treat the LLC or Corporation consistently and clearly as a separate entity, not as an extension of your own personal affairs.  

Of these, #5 is by far the most tricky.  However, you must get this one right.  Be sure to act fairly / legally in all your business dealings, diligently keep personal and business items separate and make sure the entity is funded properly.  We can help provide this guidance.

This website is designed for general information only. The information you obtain at this site is not, nor is it intended to be, legal advice and does not form an attorney-client relationship. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. However, please do not send any confidential information to us until such time as we have agreed that an attorney-client relationship has been established. Practice Limited to North Carolina.
Copyright 2014, Jeffrey T. O'Briant

Protecting Property & People