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Contracts
and Claims
Timely articles covering the most pressing issues
facing construction firms in the Midwest
Business entities –
filings with the state
by Richard A. Chapo
articlecity.com
SAN DIEGO, CA October 23, 2005
– Nearly all small businesses should form
entities to limit their exposure to civil
liability in the form of lawsuits. In forming an
entity, certain documents have to be filed with
the state in question.
States
To the surprise of some, state law instead of
federal law governs business entities. When
forming an entity, you should look to the
secretary of state for your jurisdiction to find
out the filing requirements. Some states provide
clear and concise information. Other states seem
to enjoy making the process difficult and
complex. Regardless, all of them have a web site
for the secretary of state.
Corporations
In most states, forming a corporation requires
the filing of articles of incorporation. Articles
of incorporation requirements differ by state,
but typically require a statement of the name of
the corporation, the number of authorized shares,
the name and address of a registered agent and
the name of the incorporator. The incorporator is
typically the person signing the articles of
incorporation. Once created, the articles are
filed with the secretary of state, which
eventually will approve and return them to you.
In most states, there is no need to file bylaws,
organization minutes or shareholder information.
Limited liability companies
Limited liability companies are simple structures
and are the creation of creative politicians in
Wyoming. In 1977, Wyoming passed the first state
laws authorizing the creation of these business
entities. Mirrored after corporations, the filing
process is similar to corporations, but with
little tweaks here and there.
Whereas corporations have articles of
incorporation, limited liability companies have
articles of organization. These articles of
organization require pretty much the same
information as articles of incorporation. The
primary difference, however, is most states
require you to use a pre-printed form for the
articles. Make sure you check with your state to
determine if this is a requirement.
Do it yourself?
If you are a sole proprietor seeking a business
entity, you can handle it if you understand the
concepts. If you don’t understand the process,
get a professional involved.
If there are two or more people in the business,
an attorney should be used for liability
purposes. These liability purposes arise when one
“owner” takes charge of the filing. When
disputes later arise, the take charge owner is
inevitably accused of organizing the filing in
such a way at to create an advantage.
Yes, it happens all the time.
About the author
Richard A. Chapo is a San Diego business lawyer
with http://www.sandiegobusinesslawfirm.com – providing legal services and
legal advice to businesses in San Diego,
California.
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