| Corporations are the oldest formal business entities | | | | people. The minutes are simply the written account of |
| we have. Still, many people are confused by the | | | | what happens at board meetings. The minutes should |
| practical things one must have for a corporation. | | | | be taken down by the Secretary Officer. They should |
| A corporation is a stand alone business entity. It | | | | then be written out and approved by the Chairman. |
| embodies a legal fiction, to wit, it acts as a "person" | | | | During the next board meeting, they should be read to |
| separate from its owners, known as shareholders. This | | | | the board and approved before being entered into the |
| fiction requires the corporation to act as its own entity | | | | corporate books. |
| by filing taxes, agreeing to contracts and so on. If a | | | | 4. Board of Directors - The Board of Directors is the |
| corporation is sued, its shareholders cannot be named | | | | oversight committee for the corporation. They make |
| in the suit unless they are involved in the alleged | | | | decisions on the overall course of action for the entity, |
| offending acts. For instance, Microsoft is a huge | | | | but do not handle day to day decisions. The board |
| corporation. If I buy stock in it, I will not be a defendant | | | | members are elected by shareholders at an annual |
| in any lawsuit filed against the company. | | | | meeting. The method of election and number of |
| While forming a corporation is obviously a smart move | | | | directors is dependent on what is written out in the |
| for many businesses, there are some formalities to | | | | bylaws. |
| running it. Paying a couple of hundred bucks online | | | | 5. Articles - The Articles of Incorporation are the |
| does not cut the bill if you don't follow through with | | | | documents filed with the Secretary of State to |
| corporate formalities. Let's take a look at some of the | | | | establish the entity. The exact language varies from |
| nuts and bolts. | | | | state to state, but they generally set out the name of |
| 1. Issuing Shares - For the corporation to be valid, it | | | | the entity, the business purpose and other things |
| must be owned by someone. These owners are | | | | required by the state. |
| shareholders. The shareholders exchange money, | | | | 6. Agent for Service of Process - Included in the |
| services or property for their shares in the entity. | | | | Articles of Incorporation, the Agent for Service of |
| 2. Bylaws - Bylaws are simple the rules under which | | | | Process is the person that accepts bad news for the |
| the entity will run. The control the administration of the | | | | business. If a lawsuit is filed, the suing party serves it on |
| corporation and its business activities. Common issues | | | | the agent. This does not make the agent a defendant. |
| covered in the rules concern things such as how | | | | They are merely the human representative of the |
| board meetings can be called, restrictions on the sale | | | | corporation. |
| of shares and so on. Most corporate books come with | | | | The above represent the general elements of a |
| form bylaws. They are not worth the paper they are | | | | corporation. Corporations can be designed in a variety |
| written on. Make sure to implement original and | | | | of ways, so there are other elements that can arise |
| accurate bylaws. | | | | given particular situations. Regardless, the above |
| 3. Minutes - Minutes are a confusing area for most | | | | represent the nuts and bolts of the entity. |