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When we work with clients that form their new Delaware companies here at Harvard Business Services, Inc. (HBS), a frequent question we receive is whether they really need to order the formation package that comes with the physical Corporate Kit or binder. Sometimes, clients prefer not to receive physical items and prefer to keep digital internal company records. While others, decide that having a physical binder to keep their company records would be beneficial to them. Clients sometimes feel having the Kit will enable them to keep all of their vital company documents in an organized, secure place.
Maintaining your company records is imperative and maintaining these records within a safe, orderly place can be advantageous in case you require the documents to settle potential disputes or if they may need to be provided to courts, or the IRS, if the need arises.
When forming a new Delaware entity if you select the formation package that includes the Kit, the gold embossed binder provided will contain information pursuant especially to Delaware companies. Below, we have listed information as to the items that will be included in the Corporate Kit:
Bylaws/Operating Agreement: If forming a Delaware Corporation, an initial set of Bylaws will be provided in the Kit. Bylaws set the rules for the company, including stockholder meeting procedures, stockholder and/or officer duties, voting regulations, day-to-day guidance, and more-all of which will be requested by the IRS in case of an audit..
If forming a Delaware LLC, the kit will include an LLC Operating Agreement template that can be utilized internally within the LLC. The operations and management of the LLC are governed by a written agreement among its owners that is not required to be publicly filed or disclosed to the Delaware Division of Corporations. As a result, an LLC allows the ability to create a customized management structure, which prescribes the economic relationship among owners.
Meeting Minute Book: The Corporate Secretary will keep the minutes from your company’s official meetings within this book.
Corporate Resolutions: We provide helpful templates for your LLC or Corporation that must be kept on file to reflect the decisions the company has made. Examples of a resolution would be a bank resolution form.
10 LLC Membership/Corporation Stock Certificates: While ownership percentages and the management structure are typically customized internally within an LLC Operating Agreement, LLC membership certificates can be issued to Members to show proof of ownership within an LLC. Members of a Delaware LLC don’t own stock, like corporate shareholders do.
For a Corporation, shares of stock can be issued internally and sometimes, clients prefer to also issue stock certificates to their shareholders to demonstrate the number of shares the shareholder holds within the Corporation. However, if you decide to go blockchain to record your stock transactions with StockTreasury, you won’t need the certificates. The Blockchain Stock Transfer Ledger takes advantage of Delaware’s enablement of “uncertificated” shares, which just means that no certificate is issued.
Membership/Stock Transfer Ledger: For an LLC, clients can keep track of the Membership and the Company Agreement and record future changes as they occur.
For a Corporation, the old school way that clients keep track of their corporation’s issued shares is within a Stock Transfer Ledger and sometimes, stock certificates are issued. These items will be included in the Corporate Kit. It’s critically important to maintain an accurate stock transfer ledger so that there are no errors in ownership. At HBS, we introduced a new platform that many of our clients have adopted called StockTreasury. This is a beneficial SaaS platform which makes it easy for clients to keep the record of their issued stock and stock transfers. This program helps clients protect against fraudulent ownership claims and is easy and secure, using industry grade blockchain technology that makes records immutable. Click Here to access another helpful link regarding the StockTreasury.
Physical Seal Embosser: While HBS provides a digital company seal that can be downloaded and entered onto company documents as the entity sees fit, the Corporate Kit will also include the physical embossing seal which is used to emboss your company’s important documents.
We sometimes receive correspondence from clients asking if they can order the Corporate Kit even though they already formed their Delaware company. If you did not obtain the Corporate Kit when forming the new Delaware entity, you can certainly order one at a later date if it is determined the kit is needed. We also provide digital templates of some of the items provided within the physical Corporate Kit.
At HBS, we strive to keep our Corporate templates on the cutting edge of the Corporate laws of Delaware. They are reviewed by or company General Counsel regularly.
If you have any questions about ordering a Corporate Kit or need assistance with forming a new Delaware company, I can be reached at 1-302-645-7400 ext. 6144 or via email at Justin@delawareinc.com.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such sourceâ€™s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
There are 2 comments left for The Importance of the Corporate KitTim Haskins Sr said: Wednesday, September 8, 2021
Would like to purchase a corporate kit.HBS Staff replied: Wednesday, September 8, 2021
Please call 1-800-345-2677 ext. 6911 and a member of our staff will be happy to assist you.Hugh HAMILTON ANDREWS said: Wednesday, September 8, 2021
Unless I missed something, you do not appear to offer a price for the Corporate Kit. Please let me know in case I decide to order one. Many thanks and best wishes HHAHBS Staff replied: Wednesday, September 8, 2021
Thank you for reading our blog! We will have a member of our sales staff reach out to you with details on ordering a corporate kit.