The High-touch Legal Services® Blog…for Startups!

© 2009-2017 Dana H. Shultz, Attorney at Law

Can We Have a Corporate Incorporator?

Sample Articles of Corporation for blog post about the corporate incorporatorMost of us think about an individual being the party that forms a corporation. As an alternative, this post discusses the corporate incorporator, i.e., a corporation that forms another corporation. (For information about incorporators generally, please see What Does an Incorporator Do? )

To start, I wondered whether various states’ statutes permit a corporate incorporator. (more…)

Units are to LLCs as Shares are to Corporations

Logo for Quora, where Dana Shultz answered a question about LLC unitsI am writing this post about limited liability company (LLC) units because of a question that I answered on Quora. Please see Why would an operating agreement for an LLC have a Schedule A and also a quantity of Class A interests?

LLC Membership Interests: Percentages

We can specify LLC membership interests in either of two ways. (more…)

You Can’t Just Stop Being a Shareholder

Logo for Quora, where Dana Shultz answered a question about how you can't just stop being a shareholderThis post explains why, in the U.S., one can’t just stop being a shareholder. I decided to write it after addressing this issue on Quora. Please see Corporate Law: What is the best method to abandon stock in a private company? (more…)

What Does It Mean to Hold X Shares?

Logo for Quora, where Dana Shultz answered a question about what it means to hold X shares in a companyI am writing this post because of a Quora question that I answered. Please see What does it mean when you have X shares in a company?

Before addressing the significance of the number of shares, I will address the significance of shareholding, generally. (more…)

What Are My Entity’s Compliance Obligations?

Frequently, the first service I provide to a client is to form a new legal entity (corporation or limited liability company). And frequently, once that entity is formed, the client’s first question is “What are my entity’s compliance obligations?”

This post provides a high-level answer to that question.

(If you form a corporation in California, you can find additional information in the Postincorporation Matters document on the Downloads page – image above.) (more…)

How Delaware Became the Incorporation Capital

Logo for Quora, where Dana Shultz answered a question about how Delaware became the incorporation capital of the U.S.This post explains how Delaware became the incorporation capital of the U.S. It is based on a Quora question that I answered recently. Please see How did Delaware acquire its status as a corporate haven?

There are a number of law review articles about the history of Delaware corporate law and how Delaware became the home to so many U.S. corporations.

In my opinion, one of the most informative articles is Arsht, “A History of Delaware Corporation Law”, Delaware Journal of Corporate Law (1976). (more…)

Parent and Subsidiary – Who Owns What?

Logo for Quora, where Dana Shultz answered a question about parent and subsidiary ownershipI am writing this post about parent and subsidiary ownership because of a question that I answered recently on Quora and a similar question that a prospective client posed to me. (Please see Can an LLC allocate ownership to individuals on a per investment basis (vs at the LLC level)?)

I always have thought that parent and subsidiary ownership were straightforward. However, that apparently is not the case for everyone. I will use an example to explain this concept. (I will refer to corporations. This discussion can apply equally to other types of entities, such as limited liability companies.) (more…)

How Can I Calculate My Share Ownership Percentage?

2% graphic illustrating share ownership percentageI am writing this post about calculating one’s share ownership percentage because of an email exchange I had on behalf of a client.

We had formed a Delaware corporation with 10 million authorized shares. Of the authorized shares, 8 million had been issued to the founder.

The founder and an independent contractor had agreed on equity compensation for the contractor. The agreed-upon share ownership percentage was 2%.

The contractor thought that he should receive 200,000 shares (2% of 10 million). The rest of this post explains how and why the contractor was incorrect. (more…)

Corporate Officers Need Not Be Human Beings (in Many States)

Logo for Quora, where Dana Shultz answered a question, stating that corporate officers need not be human beingsThis post discusses my surprise at finding that there apparently is no requirement that corporate officers be human beings.

My answer to a Quora question is the basis for this post. Please see Could an A.I. create a company and do all the functions typical of another company?

I was about to write an answer stating that corporate officers be natural persons (human beings). But with a bit of research, I found that apparently is not the case! (more…)

What is a Certificate of Determination?

Logo for Avvo, where Dana Shultz answered a question about: a Certificate of DeterminationOne of my Avvo answers led me to write this post. Please see CA corp Certificate of Determination: must it include tag-along and drag-along provisions?

Corporations, by default, issue common shares to shareholders. However, corporations also can issue preferred shares. Preferred shares have characteristics (“preferences“) that typically make those shares more desirable than common shares. Please see What is Preferred Stock?

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