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 (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.

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.

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.

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.

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 that 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.

1. File Articles of Incorporation. The initial step in
incorporating a business is to file articles of incorporation in the
state Corporate Filing Office, which is usually the secretary of
state’s office. This is done in the state where you choose to
organize and/or do business.

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 initial incorporator(s) will generally hold the organizational
meeting. If directors are named in the articles of incorporation,
then the directors will usually hold the organizational meeting.
(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 that is
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.