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© 2009-2018 Dana H. Shultz, Attorney at Law

Delaware’s Franchise Tax – A Tale of Two Methods

Seal of the Delaware Division of Corporations, symbolizing this post about two methods for calculating Delaware's franchise taxIn an earlier post, In Delaware, No Par Value Can Cost a Bundle, I discussed the two methods by which Delaware’s franchise tax for a corporation may be calculated. This post discusses the history of those two methods.

To some extent, this post is educated guesswork. It is based on a Quora question that I answered. Please see What is the rationale/reason (not math) behind the two methods of calculation for Delaware’s domestic franchise tax fee?

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If You Incorporate in the U.S., You Can’t Remain Anonymous

Graphic: no anonymous usersRecently, two different individuals emailed me about their desire to form and run a legal entity while remaining anonymous.

I had to tell them that they could not achieve their objective. This post explains why that is the case.

Initial Formation is Easy

It is easy for a founder to be anonymous when taking the first step to form a corporation or a limited liability company (LLC). (more…)

What is a Corporation’s Incorporation Date?

Logo for Quora, where Dana Shultz answered a question about a corporation's incorporation dateThis post explains how a state assigns a corporation’s incorporation date and how you can find the incorporation date for a given corporation. I first wrote about this in my answer to a Quora question. Please see What is the date of incorporation? Is it the date the articles of incorporation are adopted and signed, or when the state agency accepts them (USA)? (more…)

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…)

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…)

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…)

When is a Shareholder Vote Required?

Logo for Avvo, where Dana Shultz answered a question about: when a shareholder vote is requiredThis post discusses when a California corporation must hold a shareholder vote.

It is based on an Avvo answer that I wrote recently. Please see Beside elections, are there corporate decisions that REQUIRE the vote of the shareholders?

California Shareholder Vote Requirements

A corporation must hold a shareholder vote to approve the following actions. Please note that this may not be a comprehensive list. Reference links are to the relevant California Corporations Code sections. (more…)

Are Dissolution and Cancellation the Same?

Logo for Avvo, where Dana Shultz answered a question about dissolution and cancellation of a limited liability company (LLC).This post is about dissolution and cancellation of limited liability companies (LLCs) in California.

It is based on an Avvo question that I answered. Please see What is the difference between a canceling or dissolving LLC? (more…)

Corporate Compliance Center Joins Hall of Shame

Part of notice provided by Corporate Compliance CenterIt is time to add another corporate compliance vendor – Corporate Compliance Center – to this blog’s Hall of Shame.

This story is so common that it would be boring if we weren’t discussing scam artists. (more…)