Stock certificates are legal documents that evidence the ownership of a specific share of a corporation. Stock certificates are issued at varied times in line with the corporate policies. You may issue the stock certificates to your primary investors after incorporation, to secondary investors when the issued capital is being enhanced etc.
Stock certificates are basically of two types. You can issue a registered stock certificate or a bearer stock certificate. Registered stock certificates are issued in the name of a bona fide investors and their name and addresses are recorded in the corporation’s stockholders register. The bearer stock certificates are issued as the name implies is a bearer instrument meaning, the physical possession of the instrument awards ownership.
Forming a corporation is the first step towards issuing stock certificates.. There are formalities and procedures involved in forming a corporation. State laws determine the rules and regulations under which a business can be incorporated in that state. You have to file the necessary application forms along with the articles of incorporation and pay the due fees. The articles of incorporation are your charter under which you will operate as a business entity in the state.
Once the formalities of incorporation is over, you proceed with the rest of the formalities of a forming a corporation. In the Articles the directors of the corporation would have been named. These directors hold a first meeting of the corporate board of directors and act on certain important tasks such as setting the corporate financial and accounting year, adopt the corporate byelaws, authorize issuance of share or stock certificates and appoint corporate office bearers. Once the stock certificates are authorized to be issued by the board of directors, the corporate officers print and issue the stock certificates to the stock holders.
Forming a corporation is best suited for large and medium business where the capital requirements are huge and highly impossible or imprudent for individuals to invest directly. As to the question Why incorporate”, by bringing in a collective of investors and their resources, professional business men manage to raise sufficient capital needed for such large business ventures. By incorporating, a separate legal entity is created and the investors are not personally responsible or liable for the entities actions or obligations. Some of these professionals prefer offshore incorporations to side step many of the restrictive regulations in states and by the federal government. Additional financial considerations like lower tax rates and tax holidays are also attractive terms to them.
One of the best things about incorporating in Utah is that you are not required to have any corporation seals. Even though you do not have to have, corporation seals to do business in Utah it is still a good idea to have one, especially if you plan to do business in other countries. Corporation seals are also important when you issuing stock certificates because they allow you to emboss or stamp the stock certificate to authenticate them.
If you plan to start a corporation in Utah, the first thing that you will need to do is determine if you want to use online incorporation services or if you want to incorporate the business yourself. Using online incorporation services can get expensive because you will have to pay their fees, plus any filing fees. If you do it, yourself you only have to pay the filing fees. The good thing about using online incorporation services is that it helps save you time and frustration because they do everything for you.
To start corporation paperwork yourself you will need to begin by picking out a name for your corporation. The name that you choose for your corporation cannot be used by any other business, nor can it be similar to any other business that is registered in your state. The name you choose for your corporation must also end in a way that makes it known to your customers and investors that it is a corporation. This can be corporation, incorporated, company, or an abbreviation of those three words.
Once you have chosen your corporation’s name you will want to begin filling out your articles of incorporation. When filling out the articles of incorporation keep in mind that you will need to have a registered agent for your corporation, you can use an individual who lives in the state of Utah, but you can even use online incorporation services as your registered agent. You will not need to include the number of directors that your corporation has, but you must have at least three directors for your corporation, unless you have fewer shareholders. If you have two shareholders you can have two or more directors, if you have one shareholder you can have one or more directors. Officers’ information is not required in the articles of incorporation, but stock information must be included. One thing to know about stock information, in addition to the class of stock that you will be offering, is that there is no extra filing fee based on the par value of the stock or the number of shares you are issuing.
Once you have filled out the articles of incorporation you will need to turn in the articles of incorporation to the Division of Corporations and Commercial Code. Once you have turned in the paperwork you will need to pay the filing fee so you can receive your certificate of incorporation. After you have filed your articles of incorporation, you will need to hold a board meeting for your corporation so you can adopt the corporation’s bylaws and formally elect the board of directors.
Each year after you have formed your corporation you will need to file an annual statement with the Division of Corporations and Commercial Code. The annual statements must be filed by the end of the second month following the month that the report was mailed from the Division. To file the annual statements you will need to pay a $10 filing fee.
To start a corporation in Florida you will need to follow five very simple steps. Keep in mind that if you do not follow these steps exactly you will not be able to incorporate your business in the state of Florida. Some people are afraid of messing up or not properly filing something out so they hire online incorporation services to do it for them.
While you can hire an online incorporation service to do everything for you, there is no need for it. Online incorporation services will charge you fees to start corporation filings. If you do everything yourself you will still have to pay the filing fees that are required for the Sate you will not have to pay the online incorporation service fees, which saves you money.
The first thing you need to do to start a corporation is to choose a corporation name. When selecting the name of your corporation you want to make sure that they name is available. Something else that you need to remember when naming your corporation is that in Florida the name of the corporation must have a corporate identifier. For corporations you can use the identifiers: “Corporation,” “Incorporated,” or an abbreviation of those words. When naming your corporation you cannot use any words that imply that your corporation is involved with a state or federal government agency.
The second thing that you need to do is to file the proper paperwork with the State of Florida’s filing office. For a corporation you will need to file your articles of incorporation, once you have filled them out. The specific information that needs to be included in the articles of incorporation is director’s information, officer’s information, and stock information, including if you plan to issue stock, this can also be referred to as a stock certificate. If you plan to issue stock, you will need to include how many shares you plan to offer and at what amount.
Once you have filed the appropriate paperwork you will need to hold an organizational meeting, even if you are the only member of the corporation. At the organizational meeting, you will need to adopt the corporation’s bylaws. Adopting the bylaws is simply agreeing to how your business is going to be run, such as adopting the director of the corporation or the officers. Adopting the bylaws has to be done before your corporation can be formed because it has to be stated how your business is going to be ran and how disputes will be handled. When preparing the bylaws you can use the state’s laws to govern your business or you can create your own laws based on your values and morals.
The fourth thing that you will have to do to incorporate your business in Florida is to obtain a Federal Employer Identification number from the IRS. You will need his number for your business to pay federal income taxes; you will also use it at the state level. Having a federal employer identification number for your corporation is similar to having a social security number; it is used to identify your corporation. You will also need to open up a business bank account for your corporation; corporation seals might be required for this step, so it is important that you have one on hand.
The last thing that you have to do to incorporate your business in the State of Florida is to obtain business license from the city or county where you will be doing business in Florida.
The technical LLC definition is a limited liability company, but many people often refer to it as a limited liability corporation. Referring to an LLC as a limited liability corporation is wrong because corporations are a separate form of business that offers their own types of protection to the shareholders. The LLC definition uses the term company because businesses that are LLCs are not incorporated; they are simply a small business.
A limited liability company differs from a c corporation in many respects. One of the main differences between a LLC and a c corporation is stock certificates. Corporations can issue stock certificates to their shareholders because corporations are owned by shareholders. An LLC is owned by members and not shareholders so they do not have a need for issuing stock certificates. By the LLC definition, a LLC cannot go public like a c corporation can. A c corporation can have private shareholders, but it can also choose to take the corporation public later. If you wish to take an LLC public, you will need to form a corporation once you have decided to go public.
A LLC also differs from a sole proprietorship because it offers certain protections that a sole proprietorship cannot. For example, an LLC member is protected from any business debts or liabilities that are incurred during the course of business, unless a personal guarantee has been signed. If your business is considered a sole proprietorship, you will be personally responsible for any business debts and liabilities that are incurred during the course of business. If you have a sole proprietorship, your personal assets can be seized, such as your car or house, to help settle any business debts and liabilities that your business owes. A business partnership also varies from an LLC in the same manner.
Despite its differences with a c corporation and a business partnership, the best way to describe an LLC is a combination of the two types of business structures. The reason for this is that an LLC combines the advantages of a partnership and a c corporation together. By combining the advantages from each business structure, you get the best of both worlds because your business has the protection that is provided to corporations, but is less formal and more flexible than a corporation is. An LLC does not require you to have any bylaws nor does it require you to have meetings. An LLC does not need to have an operating agreement, which is similar to the bylaws of a corporation; it is still a good idea to have one in place.
Part of the LLC definition is the taxation of the LLC. According to the IRS, the LLC is not a valid business structure; it is not recognized by the IRS for federal tax purposes. If you choose an LLC for your business structure, you will need to classify your LLC as a corporation, partnership, or a sole proprietorship for federal income tax purposes. With an LLC, you are receiving a tax advantage because you are choosing how your business is going to be taxed, unless your LLC is automatically classified as a corporation under the IRS guidelines. Most LLCs choose to be taxed as a business partnership or a sole proprietorship because that allows for pass-through taxation and allows you to avoid the double taxation faced by corporations, unless you classify your LLC as an S corporation.
