STARTING A FLORIDA CORPORATION
A. Process of Incorporation - Overview - 3 Essential Steps:
(1) Preparing Articles of Incorporation according to the requirements of state law.
b. Signing the Articles by one or more incorporators
c. Submitting the signed Articles to the State’s Secretary of State for filing
(2) Service co.’s – Corporation service companies will prepare articles, bylaws, stock certificates, and organizational minutes, file the proper documents, and act as registered agent in the state of incorporation and in other states where the corporation is qualified to do business.
B. Articles of Incorporation
(1) Name of Corporation – Articles must state corporation’s complete name and include a reference to its corporate statues, e.g. “Corporation,” “Incorporated,” or “Inc.”
a. Different from other names in state – Must be “distinguishable upon the records” , or in some states it must not be “deceptively similar” to another.
(2) Registered office and agent – Articles must state the corporation’s address for service of process and for sending official notices.
a. Registered agent – Often, the Articles must also name a registered agent at the office on whom process can be served.
b. Changes – Change is registered office must be filed with the Secretary of State.
(3) Capital structure of corporation – Articles must specify the securities the corporation will have authority to issue.
a. Describe classes of authorized shares, no. of shares of each class, and privileges, rights, limitations, etc. associated with each class.
(4) Purpose and powers of the corporation – The Articles may (but need not) state corporation’s purposes and powers. Modern corporations can engage in any lawful business.
a. Ultra vires doctrine – With decline of this, a “purposes” clause far less important.
(5) Optional provisions – Articles can contain a broad range of other provisions to “customize” the corporation.
a. Voting provisions – Calling for greater-than-majority approval of certain corporate actions, such as mergers or charter amendments;
b. Membership requirements – Example: Directors must be shareholders, or that shareholders in a professional corporation be members of a profession; or
c. Management provisions– Requiring shareholders approve certain matters normally entrusted to the Board, such as executive compensation.
C. Incorporators
(1) Role – Purely mechanical: sign the articles and arrange for their filing. If the articles do not name directors, the incorporators select them at an organizational meeting.
(2) Fade away – After incorporation, the incorporators fade away and have no more continuing interest in the corporation.
(3) Corporation as incorporator – In some states, the incorporators must be natural persons, but the trend is that a corporation may act as an incorporator.
D. Filing Process – Simple process. Under the MBCA, the state officials must accept the Articles for filing if they meet minimum criteria.
(1) public documents – Once the Articles are filed, they become public documents.
a. Confirming existence: Certificate of existence or certificate of incorporation from Secretary of State; Receipt returned by Secretary of State when Articles are filed; Copy of Articles with original acknowledgement stamp by Secretary of State; Certified copy of the original articles obtained from Secretary of State for fee
E. Organizational Meeting – Creates the working structure of the corporation, but follows a script devised by the corporate planner.
(1) Election of directors – Unless initial directors named in Articles will remain in office;
(2) Approving Bylaws – Govern internal structure of corporation
a. Bylaws have assumed greater importance in corporate practice.
b. Must be consistent with the Articles and state law.
(i) Not enforceable if they deviate too far from the traditional corporate model.
(3) Electing officer;
(4) Adopting preincorporation promoters’ contracts (incl. lawyers’ fees for establishing corporation);
(5) Designating a bank for deposit of corporate funds;
(6) Authorizing issuance of shares;
(7) Setting consideration for shares.