The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
Lawyer Andre Bouchard was confirmed on April 9 to lead the Delaware Court of Chancery, replacing Leo Strine, who has gone on to become chief justice of Delaware’s Supreme Court. Bouchard, 53, will serve a 12-year term.
The Delaware Court of Chancery consists of one chancellor and four vice chancellors, all nominated by the governor. This non-jury trial court has adjudicated tens of thousands of highly complex and detailed cases concerning some of the largest and most influential corporations in the world. It is recognized as the nation’s preeminent forum for determining disputes involving the internal affairs of Delaware corporations and other business entities. Its exposure to and competence in issues of business law are unmatched.
Bouchard, a Harvard Law School graduate, has nearly 30 years of experience practicing law in Delaware. After founding his own law firm, he went on to experience a long career before the Court of Chancery. In a 2012 shareholder lawsuit, he represented Google Inc’s executive chairman in a case challenging the company’s plan to issue a new class of stock. In 1997, Bouchard represented Walt Disney Co. in one of the court’s most well-known cases when the shareholders' lawsuit failed to hold the company’s board liable for an allegedly wasteful severance package paid to former Disney president Michael Ovitz. This case was handled just a couple of miles from Harvard’s headquarters.
Recently, the state of Delaware hired Bouchard’s firm to handle a high-profile case involving the state’s plan to offer single-game sports betting. Another issue handled by his firm involved allowing Chancery judges to hear private arbitration cases. As Governor Markell noted, "Andy Bouchard has demonstrated a remarkable ability to dissect complex legal issues and vigorously represent his clients. He is well recognized for his professionalism and ability to think quickly on his feet in the courtroom."
"I am really so energized and so excited for every aspect of this job, not just the corporate franchise and the key importance it has for this state which I have total respect for and take as a very serious responsibility and undertaking, but for everything it does for ordinary citizens of the state," Bouchard said after his confirmation. "It's an absolute privilege for me to be able to do it and to be in a position where I can give back to my state after many years of being in private practice."
Whether you've outgrown your office or just want to relocate, moving a company can be tough. Making a move means you'll need to update your business address with the IRS, but did you know that you'll also need to update the IRS with any changes to your company's responsible party on your EIN (Employer Identification Number)?
Here's how to change your business address and when you need to do it.
If you incorporated your entity and have obtained your EIN for your company, you provided contact information for a "responsible party." The responsible party is an officer or member of your company.
If that person changed since you obtained your EIN, you'll need to update the responsible party on file with the IRS. Luckily, the process isn't complicated.
As of Jan. 1, 2014, the IRS released a new form called the Change of Address or Responsible Party — Business form 8822B that is to be utilized by businesses to update their current contact information for the responsible party on file with the IRS. This form must be filed to report the most current information for this responsible party within 60 days of the change.
The reason the IRS has now provided this new requirement is because they need to be able to update their records so that any tax refunds, or any other IRS communications can be sent to the appropriate party in a timely fashion. Most businesses will appoint an individual who is authorized or has control over the funds and assets in the entity.
The new regulations require you to report any of the following changes:
Make sure that you include details like the suite, apartment, or room number.
You don’t want to miss the deadlines set out in these requirements.
You can use a P.O. Box, but only if your post office does not deliver to your physical address.
A foreign address is also acceptable.
For an individual, you will need to list their full and correct name, social security number, or ITIN (individual taxpayer identification number).
You will need to include all the previous responsible party information and the new information as well.
Once the form has been completed, you'll need to send it to the Department of the Treasury, at your nearest Internal Revenue Service Center.
Let us know if we can assist you with any questions or concerns regarding how to change your business address. We would be happy to help. Simply call us at 1-800-345-2677.
Were too many shares authorized for your Delaware corporation at its inception? Were too few authorized? If so, you may want to know how to amend stock for your Delaware corporation.
Often after the corporation is formed, clients will come to the conclusion that they have authorized far too many shares of stock than is needed, or in other cases, not nearly enough. Maybe things are not taking off as quickly as you would've hoped, or you're just not ready to bring in investors, and you need to amend the certificate of incorporation, reducing the number of shares. On the other hand, hopefully, the company has grown far better than expected—you're ready to go public and you need to authorize more shares. Whatever the reason may be, Harvard Business Services, Inc. can help.
Harvard Business Services, Inc. can assist with filing the stock amendment to update the authorized shares of stock for your Delaware corporation. Harvard will prepare a Certificate of Amendment for signature, and send it to you via fax or email. Once the Certificate of Amendment is signed, the document will need to be returned by fax or email to Harvard Business Services, Inc. The Certificate will then be filed with the state of Delaware later that day. The state typically takes two to three business days to return the receipt of filing. As soon as the approved amendment is available, we will forward a copy to you for your records.
Please note that your annual Delaware Franchise Tax payment may be affected by a stock amendment since the tax is determined by your authorized shares of stock. A Delaware corporation with 5,000 authorized shares or less (aka a minimum stock company) will pay the minimum Franchise Tax of $225 per year. Corporations with 10,001 shares or more will typically pay a minimum Franchise Tax of $400 per year, depending on gross assets and issued shares.
Please give us a call today (800-345-2677) if you have any questions about amending the stock for your Delaware corporation and how it will affect your Delaware Franchise Tax.
The Lean Startup" by Eric Reis. If you seek a process that will guide you as you build a sustainable business, read this book. Seriously.
Eric Reis co-founded IMVU, an online social entertainment Web site with over three million active users, and he is well known for his popular blog, StartupLessonsLearned.com. In the book, Reis questions two common approaches to building a start-up; the business plan method and the let’s just do it approach. He proposes a theory of entrepreneurship called the Lean Startup that applies Toyota’s lean manufacturing principles to entrepreneurship. Of the Lean Startup approach, he writes, "It is more concrete, more accurate, and faster than market forecasting or classical business planning. It is the principle antidote to the lethal problem of achieving failure: Successfully executing a plan that leads nowhere."
Here is a summary of relevant insights from the book:
If you are interested in the following companies: Aardvark, Dropbox, Food on the Table, Grockit, IMVU, Intuit, Votizen, or Wealthfront, it is worth picking up a copy of the book and reading Reis’s narrative on each.
A serious manual by a seasoned entrepreneur, "The Lean Startup" takes on a worthy cause—"to improve the success rate of new innovative products worldwide." Whether or not the lean approach is for you, "The Lean Startup" is guaranteed to challenge and inspire you with new ways of thinking about entrepreneurship.
You do not need a Delaware address to incorporate there. This is one of the most common misconceptions about forming a Delaware corporation or LLC. You do not need to live in Delaware, nor do you need a Delaware address to form a Delaware company. In fact, many of our clients have never even visited the state of Delaware.
The state of Delaware merely requires all Delaware corporations and LLCs to maintain a Registered Agent who physically resides in Delaware. As part of their service, the Registered Agent provides the address you need.
What is your Registered Agent responsible for? Here's an excerpt from one of our blog articles:
"A Registered Agent is the liaison between your company and the state of Delaware's Division of Corporations. We are responsible for receiving and forwarding government notices and legal documents to our clients in a timely fashion. Some examples of documents received and forwarded are franchise tax reports, late notices, and void notices from the secretary of state, and service of process for legal actions or proceedings against your company."
As your Delaware Registered Agent, Harvard Business Servcies, Inc. is required by law to have on file the name and address of the company's contact person for correspondence purposes. This contact person and business address is for our records only and is not made public. The address of your company can be anywhere in the world.
Harvard Business Services, Inc. offers Registered Agent service at the best price in the industry—just $50 per year—guaranteed to remain fixed at $50 per year for the life of the company as long as you keep your company in good standing, with on-time payments. You can pay for multiple years in advance and save even more. Pre-pay and get two years of Registered Agent service for $90, or three years for $125.
Call Harvard Business Services, Inc. today to speak to one of our helpful customer service representatives for further details on our Registered Agent and Delaware company formation services, or appoint us as your Registered Agent with our online order form. We’re ready to assist.