INTB 336 Chapter Notes - Chapter 5: Retained Earnings, Restricted Stock, S Corporation
26 May 2017
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Incorporation: entrepreneurs should recognize that careful attention to initial structuring details can help avoid future misunderstandings, founders should understand the critical terms of the firm"s charter documents. It is best to form the entities in the state where its principal business is or in another state with a well-developed body of corporate law, such as delaware. Delaware allows a corporation to have only one director whereas california requires at least three unless there are fewer than three shareholders. Amendments to the certificate of incorporation can be quickly filed in delaware, whereas other states give a pre-filing review process that can take several days+ Delaware has a specialized and experience court dedicated to the swift resolution of corporate disputes. Incorporating in a state other that principal state of business usually result in higher fees and other costs due to need to comply with certain filing and regulatory requirements in both states.
