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Corporations

Corporate law involves more than simply incorporating companies. It also involves forming small companies through partnership agreements and limited liability companies. Limited liability companies are virtually a hybrid of partnerships and corporations. They are often treated like partnerships with respect to tax matters, but they are also afforded, by statute, insulation from liability, similar to what a corporation can provide its individual owners. For example, a member of a limited liability company will not be liable personally for liability incurred by the company, and the liability is limited to the extent of the company's assets.

The typical process involves drafting a document, such as an agreement or articles which are recorded with the Kentucky Secretary of State. However, that is just the beginning. There are also typical internal documents which are not recorded which reflect the formation and operation of the company. These include Organizational Meeting Minutes, Bylaws, Shareholder Agreements and tax applications. I also recommend that the small business retain a good accountant at the outset.

Beyond the initial formation of the company, there is the need for Annual Minutes to be drafted to document that the company is actually operating like a corporation, even if it may consist of only one or two people. This documentation may be important in later determining whether the owners of the company are protected from liability, or whether their company is just a shell, which may expose them to personal liability.

Typical information needed to form a company is as follows:
1. Proposed name and principle address for the company.
2. Name, address and social security number of each owner.
3. Name and address of the person or entity which is going to serve as the process agent for the company.
4. Names and addresses of the company's officers: President, Vice-President, Secretary and Treasuer.
5. Hame and address of the bank which will serve as depository for the company.
6. The amount of capital used to form the company.
7. The number of shares of stock to be issued (for corporations).

Feel free to call or email me with any questions you might have.