1Reservation Form for a Business Name (Corps and LLCs)
A business name reservation form does exactly what it says on the tin: it lets you reserve a distinctive name for your company while you finish the incorporation procedure. This is useful since two companies in the same neighborhood cannot have the same name if it causes customer confusion. Two restaurants, for example, cannot be named Tasty Food LLC or Tasty Food Inc.
You may do an online name search to see which company names are available at most secretary of state offices. If the company name you wish to use is already used, you may request that the state “reserve” it for a certain period of time—usually 60 to 120 days. During that time, no other company owners will be allowed to claim that name.
Articles of Incorporation (Articles of Incorporation) (Corps only)
C-corporations and S-corporations both have articles of incorporation as its fundamental document. For your company to exist, you must submit these papers with the state. The information included in the articles of incorporation varies according on the state, however it usually contains the following:
Name, address, and primary location of the company
The corporation’s mission
The number and kind of shares available (if the corp is issuing stock)
The original board of directors’ names and addresses are shown below.
The corporation’s registered agent (the person or business that will receive official mail and legal documents on the company’s behalf)
Name, address, and signature of the incorporator submitting the form (typically you, your attorney, or a third-party incorporation service if you’re using one).
To process the articles of incorporation, all states require a fee (usually between $100 and $500). The state will give you a certified copy of the articles after it has been processed, confirming that your company has been authorized to conduct business in the state.
Organizational Articles (LLCs only)
For LLCs, the articles of organization are the same as the articles of incorporation. They register your LLC in the state where you are registering it. The articles of organization, like the articles of incorporation, provide fundamental business information such as:
Name, address, and primary location of the company
The LLC’s mission
Names and addresses of the LLC’s first members or management
The LLC’s registered agent (the person or business that will receive official mail and legal documents on the company’s behalf)
Name, address, and signature of the filer (typically you, your attorney, or if you’re employing one, an incorporation service)
All states charge a fee to handle articles of organization, just as they do for incorporations. The state will give you a certified copy of the articles after processing your application, certifying that your LLC has been authorized to conduct business in the state.
Bylaws of the Corporation (Corps only)
Corporate bylaws specify how the organization’s shareholders, executives, and directors will divide power and administer it on a day-to-day basis. Corporate bylaws, together with the articles of incorporation, are the most important organizational documents for a business.
The following information is often included in corporate bylaws:
Name, address, and main location of business are all basic company information.
Shareholder meetings, board meetings, and annual meetings are held on a regular basis, with processes in place.
How will directors and officers be elected and replaced when vacancies arise?
Officer types and duties (e.g., CEO, CFO, CMO, etc.).
Adoption of resolutions by the board of directors follows a certain procedure.
Procedure for maintaining business records, including audit frequency
Amending the articles of incorporation and bylaws is a simple process.
The number, kind, and power to issue stock shares
The process of dissolution
The articles of incorporation and bylaws serve distinct objectives, despite the fact that many individuals misunderstand them. The first just establishes a skeleton framework for the company, while the latter has all of the specifics for managing and operating the company on a daily basis.
Contract of Employment (LLCs only)
An operational agreement is comparable to a corporation’s bylaws. The LLC’s structure and day-to-day management procedures are detailed in the operating agreement.
The following items are usually included in an operating agreement:
Whether or whether your LLC will be governed by members, managers, or both.
Each member’s and manager’s rights and duties
How to deal with vacancies in the ranks of member or manager
How can I add more members to my team?
How do you deal with a member who wants to sell their stock in the company?
Methods of obtaining extra funds
The procedure for changing the articles of incorporation and the operating agreement is as follows:
Procedures for dissolution
Only a few states (California, Delaware, New York, Maine, and Minnesota) require LLCs to have an operating agreement, and you are not required to submit one. However, having one is necessary to plan out how you’ll conduct business and prevent future conflicts. It’s a good idea to keep your contract alongside other essential company documents.
Minutes of the Meeting (Corps only, but beneficial for LLCs)
Every state mandates that businesses keep and securely preserve corporate records in order to provide a paper trail for government audits and other legal reasons. Because they capture key business decisions, meeting minutes are one of the most essential corporate documents. All official meetings, such as shareholder, board, and annual meetings, should be documented. The following are some items you should record in your meeting minutes:
Date, names of those in attendance, and whether or not there is a quorum to make binding decisions on behalf of the company
Appointment of a new officer or the election of a new director
A director or officer’s resignation
A business loan is taken out by a corporation.
A significant contract is signed by the corporation, and insurance is purchased by the corporation.
Investing in stocks
Only companies are usually obliged to maintain meeting minutes under state legislation. Owners of LLCs and companies, on the other hand, should maintain detailed meeting minutes. It’s not nice to consider, but they’ll come in useful if your company is audited by the government or if someone sues you.
Resolutions of the Board of Directors (Corps only, but beneficial for LLCs)
Board resolutions codify and record board decisions, as well as indicate how directors voted on various issues that impact the business. These documents are necessary for compliance if a board’s decision is ever brought into question, for example, in a lawsuit or during an audit.
For each of the following kinds of business choices, it’s a good idea to have a board resolution:
New policemen are being hired.
Shares of the company are being sold.
Purchasing a business or a portion of a corporation
directing corporate money to a critical project
Approving a loan for a company
A contract’s approval
Resolutions should be kept alongside other essential business documents including articles of incorporation and meeting minutes. Board resolutions have a standard structure that includes the date, number, and title of the resolution, as well as a summary of what the board determined. After that, make a list of all the directors who were there, who voted yes or no, and their signatures.
While LLC resolutions aren’t needed, it’s a good idea to maintain track of key choices in case of a future disagreement.
Stock Certificate No. 8 (Stock-issuing corps only)
A stock certificate is a piece of paper that documents the sale and acquisition of a corporation’s shares. Traditionally, stock certificates were tangible pieces of paper, but most businesses now have digital equivalents. [1] The company’s name, the shareholder’s name, the date of the sale, the signature of the board member who approved the stock sale, and the company’s seal will all be included on the certificate.
Shareholder Agreement No. 9 (Stock-issuing corps only)
Shareholder agreements include issues that aren’t covered by the corporation’s bylaws, such as shareholder rights and obligations.
A typical shareholder agreement will include the following provisions:
How may shareholders sell their shares if they decide to leave the company?
When a shareholder dies or becomes incapacitated, what happens to their shares?
When and how will the company pay dividends?
The number, kind, and value of shares are all factors to consider.
Which board initiatives need shareholder approval, and how many shareholders must approve?
A shareholder agreement isn’t necessary for every small company, and it’s not required in any state. If your company has many owners, though, a formal shareholder agreement is a smart idea.
Annual Report No. 10 (Corps and LLCs)
In most states, all registered business entities are required to submit an annual report and pay an annual tax or processing charge by a particular date each year. You will lose your ability to conduct business in the state if you do not file your yearly report.
Every state has its own criteria for your annual report, and you may find out what they are by contacting your company’s secretary of state office. It’s usually only fairly basic information to keep the state up to date on your firm, such as the business’s address, the names and addresses of the owners, and the information for the registered agent.
Form S-2553, page 11 (for S-corp Election)
You must submit Form S-2553-Election by a Small Business Corporation with the IRS to qualify your company as an S-corporation. S-corporations vary from regular C-corporations in a number of respects, the most significant of which being taxes. “Double taxation” applies to C-corporations. Shareholders must pay taxes on dividends on their personal tax returns, and owners must pay a corporate income tax. S-corporations, on the other hand, are pass-through companies. Profits and revenue from the business are passed through to the owners’ personal tax returns, where they are taxed at their personal income tax rates.
If you don’t file Form S-2553, your company won’t be able to be an S-corporation and will be taxed as a C-corp. The form must be filed during the first 75 days of the tax year in which the S-corp election is to take effect, or in the year before to the year in which the S-corp election is to take effect.
Incorporation Documents Can Be Helped By Online Legal Firms
Don’t worry if you’re having difficulty keeping track of this long list of incorporation papers. There is assistance available. Many online legal firms, such as Incfile, Rocket Lawyer, and LegalZoom, can assist you with filing incorporation papers and completing the majority of the legal procedures listed above in order to keep your company organization in good standing. For a single document, prices vary from $10 to $20, or you may pay a monthly subscription for unlimited access to company legal documents. Some legal websites will even put you in touch with a lawyer to discuss your case. This is beneficial both when you first start your firm and as it grows.
