Corporate Establishment simply refers to the creation of a new corporation. It could be a completely new entity or a reincorporation of an existing entity in which the personality was terminated voluntary or involuntary.
Voluntary termination refers to the cessation of a corporation as a voluntary act or a majority decision of the stockholders.
Involuntary termination is the opposite. If the termination of the corporation was caused by other reasons than the decision of the majority of the stockholders then it is involuntary.
Either way, they have to go through the process of corporate establishment again.
Corporate establishment is pretty complicated. A number of things have to be considered before you can start doing business and performing transactions.
A Los Angeles attorney who is an expert in corporate laws of California will be very helpful in the processes of corporate establishment.
Here are some steps where your lawyer can help you in establishing your corporation.
• Pick a name for your business and check for its availability - Make sure that the name you choose is unique and appealing to your market and that you are not violating anyone’s rights to a name. The Trademark Law prevents businesses from using names that can be confused with another business name.
• Register the Corporate Name – Your business name is automatically registered when you file your articles of incorporation and it will ensure no other business entity can use the same name. However, if you plan on selling products or services under a different name, you must also file for a fictitious name statement with the Secretary of State or Department of corporations.
• Picking a place to incorporate – If you plan to do business only on your home state then you can register your business there. But if you plan to do business with other states as well, you may need to register as a foreign corporation on the other state you will be doing business in.
• Choose Directors – Depending on the size of the corporation, the board of directors can have a number of members. Directors are usually indicated on the articles of incorporation.
• Create Articles of Incorporation – Articles of Incorporation acts as charter that proves the existence of your corporation. Included n the articles of incorporation are business name and address, purpose, registered agent and stock information.
• Create corporate by laws – This will usually include the following:
o Identifying information
o Directors and corporate officers
o Shares and stock classes
o Corporate record keeping
o Amending articles
• Create a shareholder’s agreement – Create a buy-out and buy-sell agreement so that the company will be prepared in case an owner opts out. Buy-sell agreements control how shares in the corporation can be bought and sold.
• File Articles of Incorporation – File these with the state’s Secretary of State Office and pay related fees.
• Open an account for corporation – Corporate accounts should be separate from personal accounts and corporate accounts should be exclusive for business use only.
• Create a minute book – Start a minute book to monitor the corporation’s meetings.
• Permits and licenses – Before doing transactions, obtain necessary permits and licenses from the federal, state and local government.
A good Los Angeles lawyer can help you follow these steps for a smooth corporate establishment.
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