Do you know what financial records a company based in Delaware must keep? It could surprise you! Investors in a corporation are not responsible for or entitled to any portion of the company’s debts or earnings. Limited responsibility for the shareholders and simplified management are only two of the numerous advantages of forming Delaware corporations. One of the first steps in founding a business is choosing the state to incorporate.
Companies often decide to include Delaware because of the state’s business-friendly regulations and attractive tax incentives. Of course, it’s wise to check in with a financial expert or legal advisor to be sure you’ve covered all your bases. Contact the helpful staff at the Delaware Secretary of State if you have any questions. To be more specific, what do you need? Where do you get such things? A summary of the corporate paperwork required by the State of Delaware is provided below.
By-Laws for the Company’s Officers
When you submit your business’s Articles of Incorporation to the State of Delaware Registry, you will also be required to provide a copy of the by-laws for the officials of your company. By-laws are a set of regulations that govern how your business will operate. These by-laws are significant because they detail how your Delaware corporations will be established precisely. However, ensure to have them drafted and ready to go before you convene your first shareholders’ meeting so that you may adjust or update them as necessary over time. Include information such as the number of people who make up the board of directors, the directors’ and officers’ names and duties, the shareholders’ voting rights, the frequency of shareholder meetings, and any other pertinent details. You need to ensure that you include a section on absentee voting, proxy voting, and board resolutions.
A Certificate of Incorporation and a Certificate of Good Standing for The Company Itself
Most limited liability companies (LLCs) are formed in Delaware, and the state’s Secretary of State issues a certificate of incorporation that includes the legal name of the company and the contact and business information that will appear on legal documents (such as checks and contracts) and tax returns. This is not as inconsequential as it may seem since it will be one of the primary sources of information on your identity and the nature of your business in case of a legal dispute.
Additional information, including the names and addresses of the company’s current executives, is included in a Certificate of Good Standing given by the Secretary of State (the people in charge). A typical reason to form an LLC is to shield business owners from individual lawsuits. This agreement ensures that creditors who file suits against the Delaware corporations will not be able to seize personal assets as compensation. Obtaining a Certificate of Incorporation is crucial since it serves as proof that your company was legally established. All officials and directors signed it, and it bears the official seal of the State of Delaware.
Membership Interest Purchase Agreement for Delaware Corporations
After forming a Delaware limited liability company, you will be responsible for maintaining a separate set of documentation for that company. One of the documents you need to make sure you have on file is a membership interest purchase agreement if you are the owner of such an agreement. Membership interest purchase agreements lay forth the specifics of a real-world transaction between a buyer and a seller, such as the nature of the goods or services being purchased, the identities of the persons involved, and the monetary considerations at stake.
If anything goes wrong with the transaction, this document may be used as evidence in legal procedures. The law requires that it be completed whenever one firm acquires shares in another company. Additionally, it helps safeguard all parties involved, which is particularly helpful in situations when monetary transactions occur. You will need to have one on file for each limited liability company (LLC) that buys or sells an ownership stake.
Articles of Incorporation
The articles of incorporation are the legal documents necessary to establish your company as a limited liability company (LLC). You are required to submit these papers to the Secretary of State in the state in which you want to do business. Information such as your company’s name, address, and directors will be requested on the form (also known as officers). After you have submitted the necessary paperwork, the next step is to choose a registered agent in the state who can accept official correspondence on behalf of your business, including tax and legal notices.
You cannot serve as your registered agent; however, an employee or a lawyer associated with your company may do so. If your organization includes more than one director or officer, one of those positions is required to sign off on the articles of incorporation.
If you’re considering incorporating your business in Delaware or moving forward with registration if you already have an active corporation or LLC, contact Corporation Center at (800) 580-4870 for more information about what we can do for you!