Pg 8 Flashcards
What is an incorporator?
An individual that takes responsibility for filing the organizing documents. He must sign the articles of incorporation and deliver them to the Secretary of State.
How do corporations select their state of incorporation?
They shop for the jurisdiction that best meets their needs. Often this is the state where the principal place of business is
Why is it smart to incorporate in the state of your principal place of business?
If you incorporate somewhere that you don’t have sufficient presence, then you have an unnecessary tax burden and you have to qualify to do business in that state
What is the internal affairs doctrine?
Corporations are governed by the law of the state of incorporation, so when choice of law comes up, that is the state that governs
What are some factors to consider in selecting your state of incorporation?
- if that state allows the type of business you want to do
– costs
– advantages/disadvantages of that state’s laws
– restrictions on the residence of incorporators and shareholders
– rights and liabilities of shareholders
– amount of taxes in that states
– the cost to defend in that state
What are the things that you have to do in order to form a corporation?
– have a promoter or incorporator that takes responsibility for filing documents
– select your state of incorporation
– choose the type of corporate form
– choose your name
– select a registered office and agent for service of process
– pick your Board of Directors
– draft and file articles of incorporation
- write the bylaws
– get a corporate seal and minute book
– hold your first organizational meeting
– file your articles of incorporation and pay fees
– get permits
– issue stock certificates
– apply for a taxpayer ID number
– issue shares
How do you choose a name for a corporation?
Go to the Secretary of State’s website to look at the list of every entity. Choose a name that is unique and includes a word or abbreviation to show that it is a business. I.e.: company, corporation, Inc., Ltd, etc.
The name cannot be deceptively similar to one that already exists
Is it possible to reserve a corporate name? If so, how?
Apply with the secretary of state. The timeframe is usually 60-90 days with a small fee.
Once you apply with the Secretary of State to name your corporation, what do they do?
They determine if the name is available and they tell you about similarities between your name and ones that are already taken
What is the reason that you have to apply to the Secretary of State to name your corporation?
They do not want there to be confusion between two or more organizations on the records
If you file your articles of incorporation, does that give you rights to the name?
No, you also have to apply to the secretary of state’s office to see if you can use the name you have chosen
What are words that you cannot use in the name of your corporation?
Bank, trust, trustee, unless you have a certificate of approval from the proper official for those names
Can a corporation assume a different name in order to enter a contract or execute a conveyance?
Yes
What should you be careful for with regard to the name of your corporation?
That it is used exactly as it is listed with the Secretary of State. I.e.: if the name is “Acme, Ltd.” then writing “acme, limited“ is not correct
What are the two main rules for choosing a corporate name?
- it cannot be deceptively similar to names already on the books
– the name must be distinguished on the records of the Secretary of State from other corporate names in use
