Incorporation Documents – What is Required?

Although the act of incorporation is complete upon the filing of the Articles of Incorporation (for a California corporation) or a Certificate of Incorporation (for a Delaware corporation), there are a number of additional documents that must be prepared by a newly formed corporation in order to (i) comply with required corporate formalities, (ii) implement a capitalization and equity compensation strategy, (iii) protect intellectual property, and (iv) position itself to attract outside angel or venture capital investors.

To incorporate in the State of California, a newly formed corporation should consider the following:

• Articles of Incorporation
• Action by Sole Incorporator
• Bylaws
• Action by Unanimous Written Consent of the Board in Lieu of First Meeting
• Founder Stock Purchase Agreement (with Vesting; 83(b) Election; and Technology Transfer Agreement)
• Stock Option Plan and Underlying Agreements
• Form of Confidential Information and Invention Assignment Agreement
• Form Stock Certificate
• Stock Ledger and Initial Capitalization Table
• Form of Non-Disclosure Agreement
• EIN Number (Fed ID Number)
• EDD Number (CA Employer ID Number)
• State Securities Filings for Founder Stock
• State Securities Filings for Stock Option Plan
• Annual Statement of Information

What are some of the the expected filing fees?

• CA Filing Fee for Articles of Incorporation – Approximately $100
• CA Statement of Information – $25
• CA Form 25102(f) Filings (Founders Stock) – Approximately $25 – $35
• CA Form 25102(o) Filing (Stock Option Plan) – Approximately $200
• Agent for Service of Process (between $50 and $200 per year) – Optional, but recommended
• CA Annual Franchise Taxes (approximately $800 per year)

For a California-based company to incorporate in the State of Delaware, a newly formed corporation should consider the following.

• Certificate of Incorporation
• Action by Sole Incorporator
• Bylaws
• Action by Unanimous Written Consent of the Board in Lieu of First Meeting
• Founder Stock Purchase Agreement (with Vesting; 83(b) Election; and Technology Transfer Agreement)
• Stock Option Plan and Underlying Agreements
• Form of Confidential Information and Invention Assignment Agreement
• Form Stock Certificate
• Stock Ledger and Initial Capitalization Table
• Form of Non-Disclosure Agreement
• EIN Number (Fed ID Number)
• EDD Number (CA Employer ID Number)
• State Securities Filings for Founder Stock
• State Securities Filings for Stock Option Plan
• Annual Statement of Information

What are some of the expected filing fees?

• DE Filing Fee for Certificate of Incorporation – Approximately $110
• CA Qualification to do Business – $100
• DE Good Standing Certificate – Approximately $50
• CA Statement of Information – $25
• CA Form 25102(f) Filings (Founders Stock) – Approximately $25 – $35
• CA Form 25102(o) Filing (Stock Option Plan) – Approximately $200
• Agent for Service of Process (between $100 and $300 per year) – Optional, but recommended
• CA Annual Franchise Taxes (approximately $800 per year)
• DE Annual Franchise Taxes (approximately $350 per year)

Disclaimer: This article discusses general legal issues, but it does not constitute legal advice in any respect.  No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Helen E. Quinn expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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