Matter
• Which state do you want to
incorporate your business in?
• Discuss minor name changes
• How many authorized shares would
you like to include in the Articles of
Incorporation?
• Discuss adding additional/optional
provisions in the Articles of
Incorporation
Explanation
• Discuss pros and cons of
incorporating in different states.
• Make sure name is not the same or
confusingly similar to that of another
corporation in the state.
• Will likely need to add some kind of
designation such as Inc.
• You can decide how you would like
to manage these shares, but it is
something we have to include in the
Articles of Incorporation.
• Probably efficient to include
provision about director
indemnification and liability
limitation.
• Discuss what this liability limitation
looks like.
Reasoning
• Modern Articles of Incorporation
requirements
• Depending on the state, the details of
incorporation are different.
• This can affect filing fees.
• The state you choose to incorporate
in determines, which laws apply to
your business.
• Once we decide on the state of
incorporation, I will check on the
details of filing in the state.
• Modern Articles of Incorporation
requirements
• Articles of Incorporation must state
the maximum number of shares the
corporation is authorized to issue.
• This type of provision is not required
but could protect you from personal
liability down the line.
• Discuss timing of incorporation
• Personal liability with using the
credit card to pay for restaurant
purchases
• Drafting Bylaws
• Discuss pros and cons of operating
as a corporation before the restaurant
begins serving food.
• Discuss benefits of avoiding
personal liability before the
restaurant even begins serving food.
• Discuss methods of separating
personal and corporate finances.
• Do you plan to get anyone else
involved in the formation and
operation of the restaurant?
• Discuss how to maintain ownership
and management control while still
providing a means for others to
continue investing.
• A corporation comes into existence
at the moment the secretary of state’s
office accepts the articles for filing.
• A corporation may not ratify acts
that took place before it came into
existence, but it may adopt them.
• You will likely receive a copy of
your articles of incorporation before
you actually begin operating your
restaurant, so be aware that you will
begin operating as a cooperation
soon.
• Forming a corporation soon could
help you avoid major personal
liability and actually help you raise
more capital. The bank also might be
a little more cooperative if it has the
protections afforded by corporations.
• If you start mixing your corporate
and personal finances too much you
may be unintentionally creating
personal liability for corporate
expenses if and when you decide to
make the business a corporation.
• Bylaws deal with the operation of
the cooperation.
• It is important to lay out the details
before a conflict arises.