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Checklist for California Corporation Articles of Incorporation
Finding a good and experienced corporate attorney to assist you in forming your corporation the right way is important. At San Diego Corporate Law, we believe in doing things right the first time. While each business is unique, there are some items that should always be included in a San Diego Corporation’s Articles of Incorporation. Here is a quick checklist on what items should be in your articles, and how we here at San Diego Corporate Law stand out from online services.
#1: Unique Name for Your Corporation
When you form a corporation, you are forming a new legal entity, something that is separate and distinct from you, as a natural person. Here in California, Articles of Incorporation must be completed and filed with the Secretary of State in order to form a corporation. Many online services will simply use the basic form articles provided by the California Secretary of State’s website, but at San Diego Corporate Law we use attorney-drafted articles to best meet the needs of your business. See here.
When meeting with your skilled and trusted corporate attorney for assistance with setting up your corporation, the first item on the checklist is often a name for your corporation. Legally, your corporate name must be:
- Unique – not in use by or deceptively similar to another corporation
- Must not be misleading by indicating that your company has some affiliation or relationship to a government or that your corporation is an insurer when it is not, etc.
Non-legally, you should consider your corporate name as an opportunity for branding and starting the process of making your business a success. See our discussion here. Thus, your corporate name should be:
- Descriptive in various ways — such as describing what you are selling
- But not overly or solely descriptive
- Memorable in a way that might lead to marketing tie-ins
- Often contains a corporate designator such as “Inc.”, “Incorporated”, or “Corporation”
Another consideration when choosing your corporation’s name is having an alternative name or two in the event that someone else already has taken the name that you have chosen. It is generally not too difficult to come up with alternative names. Depending on your business, and what type of specific wording you hope to use, it can’t hurt to have a couple back up names just in case.
#2: Street and Mailing Addresses for Your Corporation
The third item on the checklist is the address for your new corporation. The articles of incorporation must have the physical street address of your business, and separate mailing address if you have one. If you want to have separate mailing address like a P.O. Box, the Secretary of State will allow both, but you must have a physical address for the corporation’s business address.
#3: Name and Address of Registered Agent for Service of Process
Next, you must have the name and address of a person or corporation that will be the “registered agent” for the corporation to handle what is called “service of process.” As a separate and distinct legal entity, your new corporation can be sued (either by a private party or by the government). When a person or corporation is sued, the legal papers must be delivered. For a natural person, the papers are hand-delivered to the actual person. For a corporation, the legal papers are delivered to the corporation’s registered agent. When forming your new corporation, you have some options.
You are able to be your corporation’s registered agent, but many businesses choose not to proceed this way. Many businesses, and the vast majority of our clients, choose to have their corporate attorney act as the corporation’s registered agent. While there are online services and third-party companies that will act as your registered agent, most if not all of them charge an annual fee for this service, even if there is no use of their services that year.
Our office acts as registered agent at no charge when we form your corporation, and rather than relying on a third-party company to pass along any documents your company has been served, we are a familiar face that genuinely cares about your business’s best interests, and we contact you directly to ensure your receipt of those documents.
#4: Number of Shares Authorized to be Issued
Next, you must know and list on the articles of incorporation the number of shares of stock to be authorized to issue. The amount of shares authorized can vary depending on your business needs, whether you will be the sole shareholder or whether you plan to bring on investors.
#5: Limits on Director Liability
At San Diego Corporate Law, we use attorney-drafted articles that are custom for your business and include language that limits director liability and provides director and officer indemnification, items generally not found on form articles. Limiting director liability is often recommended to protect the directors of the corporation from personal liability for monetary damages in the event of a breach in director’s duties to the corporation or to the shareholders, and other acts and omissions. Since most online services that offer incorporation services use form articles, they do not include provisions specific to limiting director liability. Our goal is to provide top-notch legal services and keep in mind the best interests of your company.
#6: Officer and Director Indemnification
Another item that is often not found on form articles provided by online services is language to indemnify the directors and officers of the corporation. This language provides the fullest possible protection of officers and directors of the corporation under California law. While agents cannot be indemnified for acts where a director is not permitted be relieved of liability, or when Section 317 of the Corporations Code expressly prohibits indemnity, it is possible to allow for indemnification in excess of the limits of the Corporations Code. As mentioned before, we at San Diego Corporate Law want to provide the best legal services we can for your business, as well as make sure you understand the value of those services.
Contact San Diego Corporate Law Today
If you would like more information about corporations and/or LLCs, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard has been named a “Rising Star” three years running by SuperLawyers.com. Mr. Leonard has the experience to help you form a corporation or an LLC. Mr. Leonard can be reached at (858) 483-9200 or via email.
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