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Whether forming a Corporation or an LLC, the majority of entrepreneurs are looking for a way to separate themselves from the debts and liabilities of their business entities; otherwise, we’d all be sole proprietors and not consider the personal consequences of a failed business venture. Most think that by simply forming the company the job’s done, and they never take the time to organize the entity so it will provide a “veil” of protection. A good way to make sure your company is protecting you from the very start, is to GET A CORPORATE KIT!!!!
Too often I hear clients say how they can’t find their Articles of Incorporation, or that a bank wants to see company documents verifying authorized individuals. These are usually the folks that were looking to save a few bucks and a chose a filing only service at the time they formed their companies. If they had bought the kit, they would’ve had a place to keep their documents, and would’ve had that corporate resolution approved by the Board of Directors showing authorized persons elected for banking. It’s just better to be prepared.
For corporation or LLC owner’s, a well documented kit should include an organization chart to give the business person an overview of how the company is organized. When completed properly, the sample bylaws, resolution forms and minutes of meetings will help strengthen the veil of any LLC or corporation. Remember, when it comes to advice, whether legal or financial, nothing can replace a good lawyer or accountant, respectively. However, lawyers are not needed to draft boilerplate minutes, bylaws, membership agreements, etc. That can save you and your newly formed company a lot of money in the beginning. For issuing stock or membership certificates having a corporate kit is a real time saver also, with official certificates imprinted with the company’s name on them, a company seal and transfer ledger right at your fingertips. For LLCs, a sample operating agreement will help the members get organized quickly, so they can begin concentrating on business.
Do it right and make sure you get your corporate kit!
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.