The purpose is simply to designate a person or business on the records of the secretary of state as the responsible party to receive information, legal papers, documents, etc., on behalf of the entity. The registered agent is most commonly the person who is forming the new entity. There are companies that act as registered agents and can be used for this purpose, but they charge annual fees ranging from $100 up to $300.

Larger companies who must register in many different states as a foreign corporation doing business in that state, often use one of the larger national registered agent companies for that purpose. A company, although more expensive, can be helpful if you are gone a lot or if you don’t have a physical address to receive legal service or mail.

1. Articles of Incorporation. This document, which is also sometimes referred to as the Corporate Charter or Certificate of Incorporation, is the official document filed with the Corporate Filing Office (usually the secretary of state’s office). It sets out the basic organization and structure of the corporation. The required contents vary from state to state but usually include, at a minimum, the name of the corporation, the name and address of the incorporator, the name and address of the registered agent, and the stock structure of the corporation, that is, how many shares of stock are authorized to be issued.

   Optional provisions of the articles of incorporation may include such items as special stock structure for preferred shares of stock, the names of the initial directors, pre-emptive rights for shareholders and an indemnification clause for directors. Any changes made to the articles of incorporation must be approved by shareholders and filed with the state. Most Corporate Filing Offices have standard forms available for articles of incorporation.

2. Bylaws. This document is not filed with the Corporate Filing Office but is an essential document for the organization of the corporation. Bylaws contain the regulations and rules adopted by a corporation to govern its internal affairs. Bylaws provide the framework for conducting corporate business such as: requirements for holding meeting, voting requirements, quorum requirements, qualifications and appointment procedures for directors and officers, etc. The state corporation law provides the requirements for bylaws. Most bylaws are fairly standard but are important and should be read and understood by the officers, directors, and shareholders of the corporation.
3. Minutes of Organizational Meeting. Once Articles of Incorporation are filed with the Corporate Filing Office, the initial directors of the corporation should hold an organizational meeting. (If initial directors were not named in the Articles of Incorporation, then the incorporator can appoint initial directors by way of a Consent in Lieu of Corporate Meeting or by adopting a resolution for that purpose). The main business normally conducted at an organizational meeting includes the approval and ratification of the Articles of Incorporation, adoption of bylaws, the appointment of officers and the authorization for the issuance of shares of stock. Other business may also be conducted as needed.

   If all directors are in agreement, then the business of an organizational meeting can also be conducted by preparing a Consent in Lieu of Corporate Meeting document providing resolutions for the various items of business described in the paragraph above. The consent must be signed by all directors.

4. Stock Certificates. Shareholders own a corporation and stock certificates are evidence of their stock ownership. Certificates are not required in most states, but it is still considered good practice to issue certificates to help provide evidence of the organization of the corporation. From a purely practical point of view, people like to have something to show ownership and shares of stock provide that. However, the real authority for ownership of shares is a board of director’s resolution authorizing shares to be issued to a certain individual or entity.
5. Shareholder’s Agreement (optional). Some shareholders desire or need to enter into a more specific agreement concerning their relationship, especially with respect to the issues of what happens when a shareholder dies or decides to leave the business. Sometimes these issues are covered in the bylaws, but most often special provisions are set out in a separate agreement such as a Shareholder’s Agreement or a Buy-Sell Agreement. These documents may contain special procedures and requirements which must be followed if a shareholder dies or decides to leave the corporation and can also provide a formula or procedure for determining the value of shares.

The fastest way to get your articles of incorporation filed is usually by hand carrying the document to the Corporate Filing Office and paying the required filing fee. In most cases, your corporation will be stamped effective while you wait. Some states now have online filing or filing by fax. Check your the Corporate Filing Office website for details.

Step 2. Conduct an Organizational Meeting. Once the articles of incorporation have been filed, the incorporator(s) or initial directors should hold an organizational meeting.
If no directors are named in the articles of incorporation, then the organizational meeting will generally be held by the initial incorporator(s).

If directors are named in the articles of incorporation, then the organizational meeting will usually be held by the directors. (An alternative to holding a meeting is to use a written consent in lieu of meeting if all participants agree on the action to be taken.)

There is no one required way to conduct such a meeting. Typical actions taken at the organizational meeting may include the following:

• Appoint Directors. At the organizational meeting, the initial incorporator(s) generally appoint the directors of the corporation to serve until new directors are appointed or elected. These may be the same person or people who are also the shareholders and officers of the corporation.
• Appoint Officers. The directors then normally appoint officers of the corporation. The typical offices are president, vice president, secretary, and treasurer. A CEO and chairman of the board of directors can also be appointed if desired.
• Authorize Stock. At this meeting, it is also common to authorize the issuance of stock to the participants in the business according to their percentage of ownership.
• Adopt Bylaws. The corporate bylaws also need to be prepared and adopted or approved. The bylaws contain the basic rules and procedures for operating the corporation. Most bylaws are fairly standard but they usually include requirements for holding meetings such as notices, number of directors and how they are selected, information about stock certificates, etc.
• Set Up Corporate Bank Account. You should set up a new bank account for your corporation. It is considered a separate legal entity, apart from you as an individual. Banks differ on their requirements, but most want a copy of your Articles of Incorporation and your new Employer I.D. number to set up the account. You should avoid paying personal expenses from the corporate account. The proper way is to pay yourself a salary, draw, dividend, etc., and then deposit those funds in your personal account and then pay personal expenses from your personal account. Your accountant should be able to set this up. The corporate account should be reserved for paying business or corporate expenses. This helps maintain the separation of the corporation as a separate legal entity and may be an issue considered by a court if you are ever sued for personal liability.

Special Note. Instead of or in lieu of holding an actual meeting, the corporate law authorizes shareholders or directors to conduct corporate business without a meeting if all of the participants agree in writing to the action being taken. This procedure can be used in place of any corporate meeting including an organizational meeting or annual meeting.

Also, if a professional corporation (one offering a professional service such as law, medicine, accounting, etc.) is formed, then usually the owners/shareholders must all hold the same professional license and can only engage in that particular profession under the corporation’s charter.

Your corporate name will only be registered in the state you incorporate in or in which you file an application as a foreign corporation. There may be other corporations with the same name in other states.

Most states now provide online searches available to the public for searching for a corporate name. Click the link below for a list of Corporate Filing Office websites by state.

For a listing of corporate filing offices: http://www.nass.org

For example, if you incorporate in Nevada but your business office is in Oregon and you do most of your business in Oregon, you will have to file and pay fees in Oregon as a foreign corporation doing business in Oregon, in addition to incorporating and paying fees in Nevada.

This dual filing can be expensive and can result in substantially more record keeping which may outweigh any potential advantages. Some larger corporations are registered as foreign corporations in every state, but this is expensive and time consuming for most smaller businesses.

Occasionally, there is a valid reason for incorporating in a state different than where you conduct business. There may be some special tax or liability advantages in a particular state that are beneficial to your special type of business.

If you operate a business that provides its product or services everywhere, such as an internet-based business, then you have more choices. However, if you do substantial business in any particular state, you may still be required to register in that state as a foreign corporation.

For more information on corporate filing offices visit:
http://nass.org
http://www.keytlaw.com

If you do business in a different state, you will be considered a foreign corporation (which means a corporation from another state) and will be required to register in that state also. If you are doing only minimal business in another state, you probably do not need to do anything. However, if you are doing substantial business in other states, then you will be required to register as a foreign corporation in each additional state.

Each state has its own definition of what “substantial business” means. However, substantial business usually means that you have an office or own real estate in a state or that you have employees in a state or that you have some other form of substantial business dealings or contacts with people in that state. It is important to find out because there can be penalties for doing business in another state when you are not registered as a foreign corporation there.

Most larger companies will be registered as foreign corporations in the different states in which they do business. Many smaller companies, depending on the nature of their business, will only be registered in their home state.