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.
Protecting Property & People