Forming the Corporation

Question 1

First step in forming a corporation

Answer 1

Filing the articles of incorporation with the Department of State by the incorporator(s)

Question 2

Mandatory provisions of the Articles of Incorporation

Answer 2

1. Names and addresses
   
   1. Name of the corporation
   2. Name and address of the initial registered agent
   3. Names and addresses of incorporators and persons who are to serve on the initial board of directors
2. Corporate purpose
   
   1. Why the corporation was formed
3. Corporate stock
   
   1. Must state the total number of shares of each class of stock
4. Period duration of the corporation

Question 3

Permissive Provisions

Answer 3

1. Restriction on transferability of shares, must be noted conspicuously on the actual stock certificate
2. Preemptive Rights
3. Corporate Repurchase of Shares
   
   1. Put-option: shareholder puts the shares back and invokes mandatory buyout

Question 4

What is a preemptive right?

Answer 4

The right of an existing shareholder to buy additional shares to maintain his proportional ownership in the corporation before the corp sells shares to public