No matter what type of entity you chose, such as, Partnership, Limited Liability Company, C-Corporation, S-Corporation, a Professional Corporation, or Non-Profit Corporation there are some similar tasks that you must complete in order to form the entity.
Articles of Incorporation or Operation
If you are incorporating then you will need to file Articles of Incorporation on behalf of your company with the Secretary of State. Articles of Incorporation establish the existence of your company with the Secretary of State. You fill out your company’s information on the Articles of Incorporation form, then file it with the Secretary of State and it will send back a conformed copy. The links for the California, Delaware and Texas Secretary of State are listed below.
The Articles of Incorporation are evidence that establishes the existence of the company and costs approximately $100, depending on the state.
Statement of Information
In addition to the Articles of Incorporation the Statement of Information must be filed with the Secretary of State, which costs around $25.00 depending on the state and entity type. The Statement of Information must be filed annually with the Secretary of State so mark your calendars. This form updates any changes that may have occurred such as change in ownership or change of address.
Bylaws or Operating Agreement
Depending on your entity type you will need Bylaws or an Operating Agreement. Bylaws are, in effect a contract among members, and must be formally adopted and amended. This document governs relations internally and externally with the company. It provides for meetings, elections of a board of directors and officers, filling vacancies, notices, types and duties of officers, committees, assessments and other routine conduct. It is a guide on how situations are to be handled and when meetings are to occur.
Shareholder or Partnership Agreement
If you are starting a business with someone then you will need a Shareholder or Partnership Agreement. Usually, when there are two or more shareholders in a corporation, they should consider drawing up a Shareholder Agreement.
This document explains what is to happen in the event of a disagreement between the parties. Even family corporations should consider a shareholder agreement, since it could settle some issues without the expense of litigation. When drawing up a shareholder agreement, you will consider your options during the expansion of your company, but be sure to also consider the possibility of negative events, such as bankruptcy or death of a participant.
Employer Identification Number
An Employer Identification Number is issued by the Internal Revenue Service. Most businesses are required to have this number. You can apply online and will receive one immediately. This number will be used to file taxes for your business and pen bank accounts. You should never give anyone this number unless they are someone you trust such as your Certified Public Accountant or your business banker.
Fictitious Business Entity Form With Your County
A Fictitious Entity Form, also known as a ʺDoing Business Asʺ or DBA form, must be filed in the County that you reside in, such as San Diego, if you want to start a business under anything other than your real name, you will be required to register a DBA. If your business is already setup and you want to do business under a name other than your existing corporation or Limited Liability Company, you will also need to register a DBA. For example, if you are a sole proprietor and your business is under a name other than your own, you need to register that name with the County.
Before filing your DBA name, you must first find out that the name is available and is not registered by another business owner. You can do this by searching the “Index of Fictitious Business Names” located at the San Diego Recorder/County Clerk’s office or online to ensure the name you intend to file is not already registered. Once you find that the name is available, complete and submit the filing form to the clerk’s office. The fee to register a Fictitious Business Name is approximately $42.00.
You must file a Fictitious Business Entity Form within 40 days of first transacting business in the County of San Diego.
Depending on the entity that you are incorporating as then you will need stock certificates to issue shares that are equivalent to equity in your company.
The above listed are some of the basic steps for incorporation but your entity may require more steps depending on your business and industry.
Coastal Pacific Law attorneys are experienced in business planning, and can help with your incorporation, contracts, trademarks or other issues in San Diego and Austin. To schedule a complimentary consultation, call (619)786-6563, or fill out a Contact Request Form.
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.