Comments for The High-touch Legal Services® Blog • For Startup Companies

Comment on How Many Shares Should My Corporation Authorize and Issue? by Dana

Dana — Wed, 22 May 2013 21:47:16 +0000

Re-emphasizing that this exchange does not establish an attorney-client relationship and does not constitute legal advice:

1. The number of shares and par value are acceptable for a Texas corporation.

2. The minimum capital contribution in your hypothetical would be $510 pursuant to the calculation that you provided.

3. Simplified a bit, the sequence of events for issuing shares is: The board approves issuing a specified number of shares to a specified shareholder for specified consideration; the shareholder pays the consideration, which is deposited into the corporation’s bank account; the corporation issues the shares to the shareholder.

Comment on How Many Shares Should My Corporation Authorize and Issue? by jane

jane — Wed, 22 May 2013 19:52:28 +0000

Very nice blog indeed!

I am considering forming a corporation in Texas, and online business. Questions:

1. Is your suggestion of 10,000,000 at $0.0001 par value per share good numbers to go in Texas?

2. If so, and if the corporation issues 51% of the stock to me as the sole founder, would I need to put into the new corporation $510 (51% of 10,000,000 x $0.0001), or $1000 (100%)?

3. When would I need to put in the money?

Thanks!

Comment on Resolving Small-business Disputes: The 50-50 Deadlock by Dana

Dana — Tue, 23 Apr 2013 16:10:32 +0000

The Sign Up button is on the right side. Choose Free Downloads from the drop-down list.

Comment on Resolving Small-business Disputes: The 50-50 Deadlock by Susan Spotts

Susan Spotts — Tue, 23 Apr 2013 15:16:17 +0000

I am having trouble finding the Downloads page on your website. I would like to see the
“Sample Mediation, Arbitration and Buyout Provisions” you refer to here.

Comment on Doing Business in CA? Be Sure to Register by Dana

Dana — Sun, 21 Apr 2013 00:06:44 +0000

The test for “doing business” is explained in the post. The reason for creating the LLC, whether asset protection or otherwise, is irrelevant.

Comment on Doing Business in CA? Be Sure to Register by JS

JS — Fri, 19 Apr 2013 07:45:24 +0000

Hi Dana,

Does operating a LLC with the sole intent being asset protection, fully knowing that no profit will ever materialize change anything? For instance if a LLC is being formed for a No-Budget Short Film production, with no paid employees, mainly to serve two functions : Protect the principals from asset exposure in the event of lawsuit : and to provide an credible umbrella company for Insurance purchases and budget expenses, would forming in Nevada pose any benefit if the film was being produced in CA. If there’s no income to ever report and the LLC isn’t a “for profit business” per se, would this LLC avoid CA’s foriegn registration requirements?

Thanks

Comment on Doing Business in CA? Be Sure to Register by Dana

Dana — Thu, 04 Apr 2013 12:06:11 +0000

A foreign entity that merely owns a CA entity, and otherwise has no activities in CA, is not engaged in “repeated and successive transactions” within CA, thus is not obligated to register with the CA SoS as a foreign entity doing business in CA.

Comment on Doing Business in CA? Be Sure to Register by Jim Watson

Jim Watson — Thu, 04 Apr 2013 04:49:22 +0000

We have gotten conflicting advice from attorneys and CPAs on this question. You seem to know this area very well, so I hope you can help us…

We acquire all of the stock in a California C corporation which has been a going concern for many years, and will continue in the same way.

We want to hold the stock in a Nevada LLC. The NV LLC will do no (ZERO) business other than hold the stock. (actually 3 of these, one for each owner)

We are CA residents. For the purposes of the SOS, do we have to register, and more importantly, are we engaged in any thing that will require us to pay franchise tax?

Our income tax to CA should be zero as there is no income to the LLC. We will of course pay CA tax & franchise tax on the profits of the CA C corp.

Comment on Doing Business in CA? Be Sure to Register by Jim Watson

Jim Watson — Thu, 04 Apr 2013 01:11:11 +0000

@Dana
Responding to your exchange with “Kay” with this time: March 6th, 2012 at 17:46 -
I think she is referring to part of your comment: “it is common for entrepreneurs who reside in CA to satisfy the foregoing test” (I interpreted you to mean that with sundry items like office supplies, cell phone bills, web access, and the occasional business trip a CA resident can not help but have many transactions in CA)
Best Regards,
Jim

Comment on “Doing Business” Requires More than an Employee and an Office by Dana

Dana — Sun, 24 Mar 2013 22:01:30 +0000

One cannot necessarily draw that conclusion. As stated in the post, the test is whether the entity enters into “repeated and successive transactions” within the state – which could be the case even in the situation you have described.