Entrepreneur’s Question on How to Incorporate
“What are all of the items (e.g., legal documents, agreements, etc.) that are required to incorporate a business? I want to make sure that I have the right foundation down as I start my company.”
When starting a new company, many entrepreneurs are uncertain or confused about the steps and documentation needed to complete the incorporation process. Whether you are hiring an attorney to incorporate or “doing it yourself” through an online service, it is important to have a clear understanding of how the incorporation building blocks fit together.
To help guide you through the process, we share below a list of key steps and documentation that you will need to cover as you launch your new corporation:
- Corporate Name Reservation(s);
- Certificate of Incorporation (or Articles of Incorporation);
- Action by Incorporator;
- Initial Board Consent (to organize the various aspects of the new corporation);
- Securities Purchase Letters (for each founding stockholder);
- Contribution Agreements;
- Stock Restrictions Agreements (for founders’ stock);
- Internal Revenue Code Section 83(b) Election filings (related to Stock Restriction Agreements);
- Proprietary Information Agreements;
- Stock Certificates and related Receipts;
- State Foreign Qualification Filings (as applicable);
- State Securities Law Filings (as applicable);
- Online Organization of Corporate Documents (or “old school” corporate minute book);
- Execution of Corporate Documents and Filings;
- Creation of Equity Cap Table;
- Federal and State Employer Identification Numbers;
- S-Corp Election-Form 2553 (as applicable);
- Foreign Ownership Reporting Rules;
- Fictitious Business Names; and
- Local Business Licenses.
As you can see, there are a number of moving parts if you plan to put the proper corporate structure in place. If you plan to incorporate on your own, then you should do your homework and make sure that you complete the entire corporation process. And, if you are hiring an attorney to help, then you should know what needs to happen so that you can manage the startup and incorporation process.
Please let us know in the comment box below what other steps or documents you put in place for your company. In particular, did you run into any problems by not putting the proper structure in place (e.g., no vesting on founders’ stock)?