Corporations

Is there a lot of paperwork? Do I have to do it all?

There’s some paperwork . . . corporations tend to have more paperwork, which is why some people might immediately gravitate to LLCs, or nothing at all. And, yes, if you want to maintain your status as a corporation, and maintain your limited liability, don’t cut corners on the paperwork. It’s important.

July 12th, 2015|0 Comments

I just put my business into a corporation/LLC. Do I have to file paperwork for that?

If you have an existing business, then its assets and contracts should get transferred to your corporation. This can look like an assignment, or a bill of sale. There are tax considerations regarding contribution of the assets of your existing business. You may also need to notify third parties, such as vendors and landlords. A stitch in time, as they say. Paperwork is king.

June 15th, 2015|0 Comments

Is there more paperwork with an S Corporation than, say, with an LLC?

The answer in most situations is going to be yes. One of the virtues of an LLC is its simplicity. Once you choose to form your business as a corporation (and then an S Corporation), or to have your LLC elect to be taxed as an S Corporation, costs for tax returns, payroll, corporate state compliance paperwork, and other accounting items get triggered. You'll need to balance the benefits of an S Corporation against the ease of use that comes with an LLC.

March 5th, 2016|0 Comments

Can I use my old bank account for my new corporation or LLC?

That would be nice, but this is the beginning of you needing to think about why you formed the corporation to begin with: to make it separate from the sins of the past. So, no, new bank account, with a new tax ID number. Sorry.

June 15th, 2015|0 Comments

What is a “share” in a corporation?

A share represents a shareholder’s ownership in a corporation. This can either be evidenced by a paper certificate or an entry in the corporation’s books.

February 19th, 2020|0 Comments

What are authorized shares?

Authorized shares are the number of shares your corporation is authorized to issue. You do not have to issue all of your authorized shares, and frequently it can be a mistake to do so. Authorized shares do not vote, and do not participate in dividends.

July 12th, 2015|0 Comments

What is a board of directors?

Directors are the individuals who direct or guide the corporation with respect its overall business model and, well, direction. The board sets policy and votes on major or extraordinary decisions. Shareholders elect directors, and directors elect officers. The “board” is the entirety of all of the directors.

July 12th, 2015|0 Comments

What are bylaws?

Whether for a corporation or in any business or political setting, bylaws are the rules that govern the procedures of the particular entity. In a corporation, the bylaws is the set of rules which address, for example, when meetings will be held, and what the duties of the officers are. Though it’s a standard document for a corporation, some LLCs will also choose to have bylaws separate from their operating agreement. Some bylaws are considered “off the shelf”, but your business, like any other, is unique, and therefore it’s a document that should be reviewed and drafted carefully to suit your particular needs.

July 12th, 2015|0 Comments

What is a Shareholders Agreement?

A Shareholders Agreement, if written correctly, will a) limit each shareholder’s ability to transfer his/her/their/its shares in a corporation, b) provide for certain voting rights or limitations on voting rights, and c) give the corporation and each shareholder the option to purchase the shares of a deceased or withdrawing shareholder. Its purpose is to minimize [...]

February 19th, 2020|0 Comments

Do I need a Shareholders Agreement for my Corporation?

Well, without it, you could easily be engaged in litigation down the road. By way of example, without an agreement in place, the shares of a deceased shareholder will vest in that shareholder’s heirs, who will then be able to review the corporation’s books and vote. If that person doesn’t understand what’s best for the [...]

February 19th, 2020|0 Comments