Incorporation Questions & Answers

As we help our customers reach informed decisions about forming business entities, we find that some questions come up more often than others. Below is a list of those most Frequently Asked Questions. CAN MY corporation own another corporation? Yes. Your corporation can own another one and can purchase it using the first corporation's stock. This is yet one more advantage among many of a Delaware corporation. In fact, under the new IRS regulations, even Subchapter S corporations can own and control major portions of affiliated companies. rnDOES MY corporate bank account have to be in Delaware? No. You don't need to transact business in Delaware, keep a bank account here, or even visit the State in order to form and operate your corporation under Delaware law. (See Why Delaware for more information.) HAVE YOUR forms been reviewed by attorneys? Yes. We retain as our company counsel a prestigious and widely acclaimed Wilmington (DE) law firm whose specialty is Delaware corporation law. This is an important consideration for at least two reasons. Your corporation or LLC is defined by the wording in the Certificate of Incorporation and the Bylaws. Delaware law allows wording in corporate papers that offers added flexibility and protection to a corporation or LLC. But many filing services use generic or boilerplate wording in their forms that don't take full advantage of the benefits of Delaware's corporate law. Our law firm writes, reads or reviews everything we do with the specific mission of drafting our corporate papers and keeping the language state-of-the-art. HOW is forming a corporation or LLC important in attracting investors? Investors, in addition to a suitable return on their money, want tangible, legal evidence of their investment (their part of ownership) in your enterprise. Stock certificates are really the only way to accomplish this. Serious and savvy investors are far less likely to invest in a "project" or an "idea" without the stock ownership structure in place. If you approach or are approached by an investor, have that structure and your business plan ready. IN MY corporate kit, is one stock certificate worth one share of stock? No. Your stock certificates are printed with your company name and the total authorized shares in your company. You choose the name of the stockholder and the number of shares the certificate represents and enter that information on the certificate.