Setting up a corporation isn't complicated. But since the majority of corporate laws were conceived around the time of the Magna Carta - when entrepreneurs were mainly in the witch-burning businesses - some requirements don't always make sense in today's gig economy. It can seem confusing. Here are 5 things every corporation needs to get started.
The majority of corporate laws were conceived around the time of the Magna Carta . . .
| YOU NEED | WHAT IT IS |
|---|---|
| Bylaws | Corporations must have bylaws describing shareholders’ rights and company operating procedures. Says who? Your state’s legislature. Bylaws shouldn’t be long and boring; they should be short and boring. All bylaws basically read the same with certain important clauses drafted specifically for your business. |
| Organizational Meeting | The shareholders must have an organizational meeting. You don’t have to sit around a rented board room wearing suits you can’t afford. A Zoom meeting at which no one wears pants is fine (just stay seated). At the Organizational Meeting, you appoint a board of directors and approve the bylaws. After that, discuss whatever you want. |
| Board of Directors | No, you’re not IBM. Yes, you must still have at least one director. Traditionally, directors report to the shareholders and oversee the people who run the company (i.e., the officers). Most startups don’t have an overly formal structure, but you still have to name a director. Stop saying “this is stupid” and do it. |
| President & Secretary | Again, your business won’t be tightly structured. But the Board of Directors must appoint a president to oversee day-to-day operations and a secretary to keep corporate records, issue notices, and keep meeting minutes. |
| Foreign Registrations | If you incorporated in New York but have employees or property in New Jersey and Connecticut, you have to register to do business in each of the other states. It’s a way of telling those jurisdictions not to forget to tax you. Not registering where required carries steep penalties. |
The Takeaway. Your management structure at startup should be simple. But it also has to comply with applicable laws. That's why OlyverApp is so valuable to entrepreneurs (if we don't say so ourselves). We'll get and keep you compliant quickly and easily so you can focus on building your business.