Experienced Corporate Formation Lawyer

Corporate formation is just that, the formation of a corporation.  But, why do you need an attorney to do it?  Well, the short answer is that you don't.  The true answer is that a corporate formation lawyer will make sure that a corporation is the correct entity for you, and not, say, a limited liability company.  Once it is determined that a corporation makes the most sense for your business, then the real fun begins.

Steps for Corporate Formation

Once the decision is made to incorporate your business, you then have to follow multiple steps and make multiple decisions about how to set up your corporation.  First, you will need to file your articles of incorporation with the secretary of state.  Interestingly, although California is the home of Silicon Valley, there is no option to obtain your articles of incorporation instantaneously online.  You can get them same day, but its a hefty fee, otherwise its a few day or a few week wait.

What's Included in Your Articles of Incorporation?

Corporate Name

Your Articles of Incorporation will include the full corporation's name.  You will need to decide on the name you wish to use as a corporate name.  This can be different from the name you will use for marketing purposes, but it does not have to be different.  You will need to decide if you want to use the word "corporation" or "Inc." or some other designation.  You also might also want to choose a couple different names in case your first choice is taken already by another corporation.

Business Address

The business address will be available to the public and should be a real business address not a PO Box or a mailing address.  If your business does not yet have an office outside of your home, you can use your home address.  Otherwise you will need to find office space or an address you can use as your principle business address.

Registered Agent

Your registered agent must be either an individual or it can be a corporation that is registered to offer registered agent services.  The individual can be the business owner or the corporate attorney or any other number or people.  However, it is important that if you choose an individual, you choose someone who is responsible.  This is because if you were to be sued or receive any official corporate notices, they would be provided to your registered agent.  You registered agent is then responsible for making sure that you receive the documentation.  If it's a lawsuit, you will have a short time period to respond, so you do not want to appoint someone who might not be available or responsible.

Number of Shares to Authorize

You can choose any number of shares to authorize.  In California, unlike other states, there is no charge per share for issuing shares, so if you want to issue 100 shares or 100,000,000 shares, its all the same to California.

Purpose Statement

This is the statement of what you will use our corporation for.  This statement can be really broad or pretty narrow.  Whether you go broad or narrow your purpose will depend on how you intent to employ your corporation.  

Unfortunately, many people believe a corporate formation is complete once the Articles of Incorporation are filed.  However, there are many more steps that need to be taken in order to fully take advantage of the corporate shield.

Do Your Bylaws Need to be in Writing?

Once your articles are filed you need to draft your bylaws.  Your bylaws are really the rules by which your corporation should be governed.  The bylaws do not need to be in writing by law, however its a good idea to have them written.  If your bylaws are not written then the law will govern your corporation rather than you having made the decisions by which you want your corporation to be run.  It's almost always most advantageous for you to have written bylaws that adhere to the way you want your corporation run rather that you having to adhere to the general law.  

Your bylaws will set forth your principle place of business.  Additionally, you will find in your bylaws the rules for shareholder meetings and shareholder voting.  The number of directors authorized to act on behalf of your corporation will also be set forth in your bylaws.  The bylaws can be general or very specific.  In some cases, such as professional corporations for attorneys or architects, the bylaws must include restrictive language about who can be a shareholder, officer or director of the corporation.  Accordingly, in most cases, the corporate bylaws should be in writing.

Issue Stock

The rule in California is unless the shares have been issued, the corporation does not truly exist.  So, in order for your corporation to come into existence, the shares must be properly issued.  That means your minutes or resolutions need to reflect the issuance of the shares and the certificates should be completed appropriately.

What Else?

Now the Articles of Incorporation are filed and the Bylaws are drafted. There is still a long checklist of things that you will need to do.  You will need to determine if you need a fictitious business name statement to be filed and if so, where?  You will need to obtain your EIN, open your bank accounts, etc.  You will also need to make sure everything is documented in your minutes or resolutions.  

A corporate formation lawyer can help guide you through all of the above steps after they help you determine if a corporate formation is right for you.