The most important thing to know about operating a corporation is to leave a paper trail of the important business activities. Set forth below are some of the most common issues relating to the operations of a corporation.
As previously mentioned, it's important to keep the business and affairs of the corporation separate from the personal affairs of a stockholder, director and officer. This means setting up a separate bank account, maintaining separate records, and keeping separate books for accounting purposes.
Directors need to hold periodic meetings, and shareholder must meet once per year to elect directors. Meetings can take place in person or by telephone. Be sure to make a written record of the items discussed and actions approved at the meetings.
Alternatively, you can just get all the directors (or a majority of the stockholders) to sign a statement approving corporate actions.
Generally, a stockholder is free to sell or transfer shares to anyone. However, with small corporations where the stockholders act more like partners and each is integral to the success of the company, you may wish to consider placing restrictions on the transfer of shares.
Stockholders sometimes enter into a buy-sell agreement, which gives the terms for when shares can be transferred or sold. A typical buy-sell agreement would state that if one stockholder seeks to sell shares to any third party, the other stockholders have a right of first refusal;
that is, the other stockholders may purchase those shares at the same price. Only if the other stockholders do not purchase those shares can a stockholder sell to a third party. Incorporating Solutions Group, Inc. gives you the option to add a buy-sell clause in the corporate bylaws.
Each corporation must obtain a federal tax identification number, which is similar to an individual's social security number. In addition, county and city business licenses may also be required. We will check with your city and county to see which type of licenses are needed.