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C-Corporations > Documents Required - Pg. 22

First Steps 7. All contracts for the corporation should be signed with the corporation's name above the signature line, and the name and title of the person signing below the signature line. This makes it apparent to the other parties to the contract that they are dealing with a corporation and not the person, and they should expect to have recourse only to the corporation's assets should something go amiss with the contract. 22 Documents Required A corporation requires certain documents to be prepared and filed with the company state's secre- tary of state as well as the IRS. After the initial filings, there are sundry ongoing requirements to operating a corporation, such as conducting board meetings, taking minutes of those board meet- ings and approving them, and so forth. Your attorney can review these with you and set up a system to make it easier for you to remain compliant. Furthermore, there are certain agreements like the shareholders' agreement (see heading "Shareholders' Agreement," this section) that are not man- dated by law but are highly recommended for proper functioning of the corporation. Note CAUTION Consulting an attorney early in thisprocess will save you money andheartache in the long run. She willhelp you figure out the capitalstructure, ownership distribution,and equity in- centive plan best fitting your needs, as well as help youdevelop tax-efficient strategies. Certificate of Incorporation/Articles of Incorporation The Certificate of Incorporation (COI) must be filed with the secretary of state of the state in which you will be incorporating (not necessarily the same as your principal place of business) to inform the government of your company's vital stats. Requirements for this document vary from state to state, but most require: · Name. · Business Purpose. For most states, this can be as general as "engaging in any lawful activity for which corporations can be organized in the state." · Authorized Capital. This is the number of shares that the corporation can issue, their par value (usually $.01), and classes of stock, if more than one. Since it is common to issue preferred stock to later investors (see discussion below) you may want to authorize "blank-check" prefer- red stock (if your state allows it) to avoid the expense of amending the articles. Blank-check preferred stock states that preferred stock is authorized and shall have the rights, preferences, and privileges that the board sets in board resolutions. · Agent's name and address. Service of process sent to this address will be deemed received, so rather than using the address of an individual associated with the corporation, hire one of the companies that provides this service inexpensively. The worst-case scenario would be that process is served on an agent no longer associated with the company and a default judgment is entered against your company. · Indemnification. Indemnification is protection (usually reimbursement and legal defense) the corporation gives certain individuals against liabilities arising from their activities on behalf of the corporation. Here is where you specify the indemnifications that the corporation will furnish its officers, directors, employees, and agents. The following provisions may or may not be permitted in your state of organization; if permitted and you desire their use, include them in your certificate: · Supermajority requirements. More than a simple majority is required for shareholder or director actions. State the threshold percentage. · Cumulative voting (see the "Where to Incorporate" section that follows). · Preemptive rights. Right of an investor to buy enough of any future rounds of financing to main- tain his or her current percentage (also known as the "kiss of death").