This post discusses the role of the incorporator when a corporation is formed and is based on a Quora answer that I provided. Please see When a third party files Articles of Incorporation as the incorporator for a company, what are the necessary steps to ensure that the company is legally released to the directors?
When I form a corporation for a client, most of the time the client is the incorporator (i.e., signs the Articles / Certificate of Incorporation).
Corporate personhood – the idea that business entities may have some of the same legal rights and responsibilities as human beings – is a contentious legal concept. However, in his recent Mind and Matter column in the Wall Street Journal (Our Brains Say Corporations Are People, Too), neuroendocrinologist Robert Sapolsky cited studies showing that as far as the human brain is concerned, corporate personhood is not merely a legal concept.
Quoting a portion of that column (emphasis added): (more…)
This post answers a question I have been asked many times: How can a foreigner open a bank account in the U.S.?
This question usually is asked by foreign entrepreneurs. They want to start a business in the U.S. And to do so effectively, a U.S. bank account usually is required. (more…)
This post – asking “May a minor form an LLC?” – is a companion to
I have been wanting to write this post for more than two years, ever since writing the corporation post referenced above. However, as explained further below, I felt uncomfortable doing so because I was somewhat unsure of the answer. (more…)
This post discusses whether one should form separate legal entities (corporations or limited liability companies) for different lines of business.
I am writing this post because I have seen this type of question online many times. The most recent occurrence was on Avvo. See Should I set up a subdivision or have a LLC or corporation own another LLC? (more…)
This post discusses how to dissolve a Delaware corporation or LLC (limited liability company) – i.e., how to terminate the entity’s existence.
For information about dissolving California entities, see How to Kill Your Company when that’s the Only Choice. (more…)
In Doing Business in CA? Be Sure to Register, I discussed when a foreign entity must register to do business in California. The test is whether the entity has transacted intrastate business, i.e., has engaged in repeated and successive transactions of business within the state. This post explores the meaning of “repeated and successive transactions“.
“Repeated and Successive Transactions” Not Defined
The term “repeated and successive transactions” appears in Corporations Code Subsection 191(a). Unfortunately, that term is not defined. However, another portion of Section 191 provides a bit of help. (more…)
This post about entering into a pre-incorporation contract is based on a question I answered on Avvo. See Can I legally speak as my company in things like terms & conditions if I have not officially registered the company yet?
The term “pre-incorporation contract” properly should apply only to corporations, because that is the only type of business entity that is incorporated. Other types of business entities, such as limited liability companies (LLCs), are formed, rather than incorporated. However, as is discussed below, a pre-formation contract (in California, at least) is treated like a pre-incorporation contract. See 02 Development, LLC v. 607 South Park, LLC . (more…)
This post about limiting directors’ voting rights is based on my answer to a Quora question. (See Can a business owner draw up bylaws/articles of an organization that limit voting rights of directors?)
The incorporator or shareholders may approve a certificate of incorporation or bylaws that limit directors’ voting rights. (more…)