How long will it take to form my corporation?
Entrepreneurs, including those who have created a tech startup in the state of California, should consider forming a corporation as their business grows. But before you get started, it’s important to understand the timeline and process involved.
Let’s say, for example, that two former roommates from UC San Diego have developed software, hired a few friends and have come to realize that in order to be considered players in the industry, they need to incorporate. The guys reach out to the California Secretary of State’s Office, the government agency that oversees the process for registering as a business entity in the state. They file Articles of Incorporation, the required forms for all corporations in California, and pay the fees associated with them.
In California, entrepreneurs can expect it to take at least 30 days after they’ve filed Articles of Incorporation papers to become a corporation. For some startups, that’s fine. But for others, it’s a problem.
In our example, the software company receives an unexpected call from a potential investor, who wants a meeting. The owners have learned that if they’re going to ask someone to write them a check, they need to be a recognized corporation —most likely a C-corp, which has shareholders, can issue stock options and is an expected structure for most investors. With an investor meeting on the horizon, time is suddenly an issue for the college buddies.
Luckily, the startup has options to move things along more quickly because they consulted with experienced corporate attorney, Michael Leonard, Esq., of San Diego Corporate Law, who was named “Best of the Bar” by the San Diego Business Journal in 2016. With the help of our attorney, they can expedite the process and become incorporated in just two weeks. If they’re nervous about the upcoming meeting and feel that two weeks is still too long, our attorney can make it happen in a mere 24 hours. The guys in our example opt for sooner rather than later, and with the help of their legal counsel, they are a corporation in plenty of time for their meeting. They’re ready to wow their potential investor and move their company in a bigger, better direction.
Each business and business entity is unique. To understand the different options and which direction will be best for your situation, you need to consult with an experienced corporate attorney. Michael Leonard, Esq., of San Diego Corporate Law, has the expertise to guide you through everything from forming your business, to creating buy-sell agreements, to executing contracts and anything in between. To schedule a consultation to discuss any business-related matter, please contact Mr. Leonard by visiting San Diego Corporate Law or by telephone at (858) 483-9200.