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Business Formation Check List_MargaretMoon
- 1. Copyright 2016 © Margaret A. Moon, esq.
All rights reserved.
Business Formation Check List
STEP 1: Choice ofEntity
1. Corporation
2. S Corporation
3. Limited Liability Company
4. Limited Liability Partnership
5. 501(c)3 Non-Profit
STEP 2: Choose a Company Name
Check with Secretary of State before filing Articles of Incorporation to make sure the name is available
Check your state’s company name requirements - many states require that the word “corporation”,
“incorporated”, “limited, or “company” (or an abbreviation) is included in the company’s name
STEP 3: File Articles of Incorporation
Prepare and file Articles of Incorporation and pay the Filing Fee
Make sure to include: a) Company name exactly how you want it to appear, b) Company’s address, c)
name and address of the Incorporator, d) Registered Agent and Office, e) total number of shares the
Company is authorized to issue, if required, and f) a statement of purpose
STEP 4: Have a RegisteredAgent and Office
Must have both. The Company itself cannot act as its own Registered Agent. However, the Registered
Office address can be the same as the Company’s address and any shareholder, director or officer can act as
the Registered Agent. BUT if the Company (or any individual on behalf of the Company) is not located
within the State of Incorporation, you must use a paid service to act as the Company’s Registered Agent and
Office. Contact the Secretary of State for a list of reputable services.
Designate these in the Articles of Incorporation; they may be amended at any point if needed
STEP 5: Shares
Designate the total number of shares the Company has the power to issue (generally no less than 1,000)
Designate any desired classes or series of shares (by default all shares are common voting stock)
*Consider placing restrictions on voting rights or having preferential treatment for payment of dividends
for some shares
* Will any shares be subject to a vesting schedule? If so, consider Section 83(b) tax election
Consider setting par value of shares (generally no more than $0.01)
* Check your state’s requirements for shares. In some states you can only have one class or series of
shares and you may be subject to higher taxes depending on the number of shares your company is
authorized to issue or what your par value is
STEP 6: Last Action by the Incorporator
- 2. Copyright 2016 © Margaret A. Moon, esq.
All rights reserved.
Must elect first Board of Directors by written resolution (must have at least one director, who may also
be the incorporator and sole shareholder)
STEP 7: First OrganizationalMeeting of Boardof Directors
May pass written Organizational Resolutions in lieu of a first meeting
Elect Officers - must have at least a CEO and CFO
Recognize filing of Articles of Incorporation
Set the Fiscal Year
Issue Shares to initial Shareholders
Authorize any other required transactions or
actions
STEP 8: Adopt Bylaws or Operating Agreement
Not required by most states (unless you’re incorporating a 501(c)3 non-profit), but highly recommended.
Many states require Operating Agreements for LLCs
Must be adopted by the Board of Directors at a meeting or by a written resolution, can be done as part of
the Board’s first meeting in Step 7
Many states have certain default provisions that can only be changed by adopting Bylaws or an
Operating Agreement
STEP 9: Opening a Business Bank Account
Banking Resolutions - must be adopted by Board in writing, must provide a copy to the Bank
Obtain a Federal Employer Identification Number (EIN), must give to Bank (also required to pay
wages and taxes)
Bank may also need a Certified Copy of your Articles of Incorporation, which can be ordered at the
same time you file your Articles
STEP 10:ConsiderS Corp Election
Requires filing Form 2553 with IRS and allows a Corporation to be taxed like an LLC
There are limitations on the number of shareholders and the types of shares S Corps can have, make sure
you comply with these requirements
STEP 11:Other Considerations
Application for Local Business Registration
Assumed Name Certificate/ DBA Name
Application to Operate Business in another
state
Local Business License or Certification
State Tax Identification Number (if
necessary)
Domain Name Registration, Terms and
Conditions & Privacy Policy for website
Trademark or Copyright of proprietary
information
Employee Stock Options
Form 1023 for formation of a 501(c)3 Non-
Profit
- 3. Copyright 2016 © Margaret A. Moon, esq.
All rights reserved.
Annual Requirements for Going Forward:
Annual meetings of shareholders and directors
File and pay annual statements and registration fees (if required)
File and pay applicable taxes (income, employment, franchise, etc.)
Other Optional Documents to ConsiderHaving:
Promissory Note/ Basic Loan Agreement
Investment or Subscription Agreement
Asset Purchase/ Sale Agreement
Partnership Agreement
Employment Agreement
Independent Contractor Agreement
Confidentiality Agreements
Services Agreements
Software/ App License Agreement
Notes for LLCs and LLPs:
Articles of Incorporation = Articles of
Organization
Incorporator = Organizer
Bylaws = Operating Agreement
Shareholder/ Shares = Member /
Membership Units
Director/ Officer = Governor / Manager