It is essential to have qualified legal guidance in order to properly form a business, maintain a business, or dissolve a business. With the online services we offer, it’s easier and more affordable than ever to get professional assistance for all of your legal needs, right from the convenience of your own home or office. Examples of some of our most popular corporate services are described below.
Forming a Corporation
Some of the principal reasons for setting up a corporation include:
- 1. Limiting personal liability of owners and protection of personal assets. The limited liability offered by corporate status is a significant benefit for owners with personal assets.
- 2. Indefinite life span of the corporate existence. A corporation will continue to exist despite the death of an owner. The operating agreement or articles of incorporation and bylaws can specify what happens to a deceased owner’s shares.
- 3. Potential tax advantages, depending on the circumstances involved and the applicable tax laws in effect at the time.
- 4. Ability to raise capital through issuing stock.
Examples of some legal documents that should be prepared during formation of a corporation include:
- Buy-sell agreement. A buy sell agreement allows the parties to agree in advance what will happen to an owner’s or member’s interest if they leave the company. In this way, the corporation can prevent the person’s interest and voting power from passing into unwanted hands and a valuation method can be specified to avoid disputes.
- Operating agreement. This is an essential document in a limited liability company to lay out the basic rules and structure of the LLC, such as membership, membership contributions, voting, management duties of appointed officers, division of profits and losses, restrictions on transfers of membership, and more.
- Employment and confidentiality agreements. Non-disclosure agreements are advised as part of employment contracts to protect the plans and designs, customer lists, marketing strategies, etc. of the company.
- Registration of trade name. Local and state laws require business name registration to avoid trademark infringement claims due to consumer confusion.
- Registration of corporate agent. A registered agent accepts official papers and communications on behalf of the corporation.
- Registration of corporation articles of incorporation or operating agreement. These documents are registered with the state in order to establish the corporate existence.
Maintaining a Corporation
The secretary of state or other governing state agency requires certain annual filings and information to be kept updated in the official state corporate records. It’s vital to have corporate records kept up-to-date to remain in good standing.
Some of the corporate maintenance services offered include:
- Reservation and registration of change of business name. Any changes to a business name need to be researched to prevent trademark infringement claims and then registered with the state and any relevant local authorities. Even a sole proprietorship is required to file a “doing business as” certificate, also known as DBA registration.
- Change of registered agent. This is the person appointed to receive official documents on behalf of the corporation, such as tax documents and correspondence from the secretary of state.
- Amendment of corporate articles. Because the articles of incorporation are filed with the state initially when forming a corporation, any changes, such as changes to classes of stock or voting rights, must be updated in the state records.
- Maintenance of corporate minutes and corporate record book. Corporate record books need to be kept up-to-date to maintain the good standing and health of the organization. Proper record keeping can also provide an important defense against a claim of unauthorized or wrongful corporate action.
- Merger agreements. A corporate merger occurs when one corporation is sold and transfers all of it assets to another corporation. The merged company no longer exists, but is absorbed by the surviving corporation. The shareholders of the merged company receive shares of the continuing corporation.
Dissolving a corporation ends its existence, and may be done through voluntary termination or involuntary termination. Involuntary dissolution is ordered through a court or government agency for failure to comply with state corporate law, such as failing to pay dues and fees, make annual filings, pay corporate taxes, or engaging in wrongdoing. Voluntary dissolution involves following the proper voting and other procedures. Legal documents typically involved in ending a business through voluntary corporate dissolution include:
- Resolution for dissolution by shareholders or governing body. A vote by shareholders, board of directors, or members will need to be voted on and passed according to the bylaws and governing documents of the company.
- Filing of certificate of dissolution. This is required to be filed with the secretary of state or governing corporate agency in order to terminate the corporate existence.
- Notices to creditors and instructions for filing claims. This is a notice given to creditors of the corporation during the winding up process. The notice will typically state a deadline for creditors to submit claims to the corporation.