Incorporation Process

Incorporation generally begins with a meeting with me to discuss how best to organize the corporation. That meeting can be done by phone, but I recommend a meeting in person especially for a start-up business. The meeting ends with completion of a questionnaire recording all of the decisions reached in the meeting, so that I will have all information needed for the incorporation work.

Legal incorporation is completed in about two business days. However, it generally takes the Secretary of State about two or three weeks to return the certified, filed articles. Therefore, three weeks should be allowed for the process.

After the articles are returned by the Secretary of State, a stockholders meeting and a board of directors meeting are needed to do several things to get the business launched. The most important items on the agenda are election of officers and authorizing the issuance of stock. Stock is usually issued right after the meeting. If a meeting in my office is impractical because of distance, I'll tell you how to do it all without me.

If the corporation is non-profit, tax exempt status must be obtained from the Internal Revenue Service. Clients never let me do that, because my rates are too high for a clerical/administrative job. That task is best suited for an intelligent, determined secretary. Therefore, applying for tax exempt status is not included in the fixed price for incorporation. I'll tell you how to do it and get you started.

If the corporation is to be owned by more than one person (Other than husband and wife as community property), they should enter into a stockholders agreement. That agreement is not legally required, but it can save litigation later. The agreement includes such things as any restrictions on an owner's right to sell the stock, and what happens to the stock if an owner dies. A stockholder's agreement is not included in the fixed price for incorporation because many customers do not want to spend any more than absolutely necessary at the time of start-up. The agreement can generally be drafted by me economically because prior versions are in the computer.

Incorporation Costs

$ 2,200 total fixed fee includes :

State fees:

Articles of Incorporation filing fee
Prepaid minimum state tax
Sec. State special handling fee
Name search and reservation fee
Officers Statement, SO-200 filing fee
Statement of stock issuance filing fee

Initial consultation to determine specifics of the corporation.
All meetings, telecons, etc. concerning the incorporation.
Investor representation letters.
Certified copy of the Articles of Incorporation.
Bylaws, corporate seal, stock certificates, minute book.
Check corporate name availability and reserve name.

Conduct shareholders meeting (or action by unanimous written consent):

Waiver of notice of the first meeting of shareholders.
Election of directors.
Ratification of IRC 1244 plan.
Elect IRC Subchapter S.
Consent to adoption of bylaws.
Minutes of the first meeting of shareholders.

Conduct board meeting (or action by unanimous written consent):

Waiver of notice of the first meeting of directors.
Certificate of adoption of bylaws.
Election of officers.
Adopt corporate seal.
Adopt share certificate.
Authorize payment of incorporation expense.
Adopt accounting year.
Authorize contract obligations.
Authorize banking transactions.
Authorize issuance of stock.
Adopt IRC 1244 plan.
Elect IRC Subchapter S. (Not including notice to IRS)
Minutes of the first meeting of directors.

Issue stock.
Corp. Comm statement of stock issue, 25102(f).
Notice to Franchise Tax Board.
Statement of Officers and Directors to Secretary of State.

Note : No taxes are included. The Franchise Tax Board will bill the corporation for the first year's minimum corporate income tax.

Do It Yourself Incorporation

You can do the incorporation work yourself, and save more than half of the cost. The action list on this page can be used as a partial checklist of things to do. There are excellent how to books on incorporation. I have one that has been loaned out many times. Plan on a two month process, to allow for a rejection by the Secretary of State.

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