Business Formation
The most frequently asked tax questions related to Business Formation
How many officers and directors does a corporation need to have ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
Generally, only one officer or director has to be appointed with the Articles or Certificate of Incorporation. This requirement may vary from state to state. Generally no more than three are created. Requirements for LLC's also vary from state to state. Speak to your local CPA about your corporations requirement's in your state.
What is the difference between Authorized and Issued shares of stock ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
Authorized shares of stock are the amount of stock that a company is approved to issue. Issued shares of stock are stock that has been issued to an entity. An entity may be a person, another business or certain kinds of trusts. Generally, stock must be issued for capitalization in most states.
Does one stock certificate represent one share of stock ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
Generally not. One stock certificate can represent any number of shares of stock up to the amount authorized, as stated on or in the Articles or Certificate of Incorporation.
Is there a fee for reserving a name when incorporating ?
Asked Monday, October 16, 2000 by an anonymous userCPA Answer:
Generally yes. In most states a fee ranging from $20 to $75 will be charged for name reservations.
In the incorporation process , what are the Articles of Incorporation ?
Asked Thursday, October 12, 2000 by an anonymous userCPA Answer:
After a person selects the corporate name and state of incorporation, a document called The Articles (or Certificate) of Incorporation must be filed with the Secretary of State of the state of incorporation. The key sections are the Corporate Name, the Purpose of the corporation, Duration, Authorized capital, Name and address of the registered agent and Other required provisions. Speak to your local CPA about the filing requirements and content of the Articles of Incorporation.
In the incorporation process , what are the bylaws ?
Asked Thursday, October 12, 2000 by an anonymous userCPA Answer:
The bylaws of a corporation contain the procedures and rules that govern the rights and powers of the directors, shareholders and officers. The bylaws are usually adopted by the Incorporator or by the Board of Directors in an organizational meeting or with the written consent in place of the organizational meeting.
What are the components of a Corporations Bylaws ?
Asked Thursday, October 12, 2000 by an anonymous userCPA Answer:
Generally, a corporation's bylaws cover the size of the Board of Directors; when and how board meetings occur; when and how shareholder meetings occur; the duties and responsibilities of the officers; The procedures for exercising voting rights; the procedure for dividends; the company's calender or fiscal year; and the indemnification of the directors, officers and agents of the corporation.
In the incorporation process , what is the minute book ?
Asked Thursday, October 12, 2000 by an anonymous userCPA Answer:
The corporation's minute book is where various important records are kept. It should include the Bylaws, Articles of Incorporation, and minutes covering all meetings and actions by the Board of Directors and shareholders. The minute book must be kept current and contain pertinent, necessary documentation. The minute book should be stored at the corporations registered office.
What is the average state filing fee for incorporation??
Asked Thursday, October 12, 2000 by an anonymous userCPA Answer:
The filing fees with the various Secretary of States vary, but generally the fee range is between $100 and $300.