Business Formation

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.

Generally yes. In most states a fee ranging from $20 to $75 will be charged for name reservations.

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.

The incorporator is the person who initially organizes the corporation and files the Articles of Incorporation. The Incorporator can be the CPA, lawyer, prospective shareholder or another individual. The Incorporator usually, uses a document called an "Action of Incorporator" to perform important functions, such as electing directors if they are not named in the Articles of Incorporation. The Incorporator also adopts bylaws, and signs the Articles of Incorporation. The "Action of Incorporator" must be dated and inserted into the corporation's minute book.

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.

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.

The filing fees with the various Secretary of States vary, but generally the fee range is between $100 and $300.

The Board of Directors should try to accomplish the organizational resolutions of the corporation by adopting them in their first meeting. Generally, they should authorize the adoption or ratification of the bylaws, the election of the initial officers, the designation of the principal officer, the designation of the corporation's banks, the selection of the calendar or fiscal year, the selection of a specimen stock certificate for the common stock, the issuance of stock to initial shareholders, the payment procedure of the organizational expenses, and the possible election of the S corporation status.

Guaranteed payments are made to individual partners for services rendered or for use of capital, and are not based on a partner's share of partnership income. The guaranteed payments are deducted from partnership income before determining the partnership's profit or loss.