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An incorporator is a person liable to initiate the process of forming a corporation by filing its articles of incorporation with the relevant state authorities. There may be one or multiple incorporators for a firm. The articles of incorporation must be ratified, and the paperwork must be filed. A company cannot be properly incorporated and legally registered without an incorporator. They may gather the required information, sign the articles, and submit them to the appropriate government authority. The incorporator's responsibilities typically occur before the business is formed, and they help ensure that the corporation is recognized legally. Learn more about who can act as the incorporator during a company's registration procedure and their responsibilities.

Key Considerations for Incorporators

The following are the key considerations for incorporators:

  • Eligibility: An incorporator must be at least 18 years old. An attorney or another person hired specifically to act as an incorporator may be the incorporator. Other options include a shareholder, director, or official, such as the president, treasurer, or secretary. This person should be authorized to act on the corporation's behalf because they are signing legal documents on the company's behalf.
  • Need for Incorporator: There are two reasons why an incorporator is necessary. Firstly, having an incorporator ensures that a representative with authority signs all documentation. Moreover, it also ensures that the company can conduct business in the state. One doesn’t need to engage a specialist to become an incorporator for forming a legitimate corporation. A business owner can also be the incorporator if they run a small business.
  • Action of Incorporator: The "action of incorporator" document is a common legal document in Delaware and California (and infrequently used in other states). It is used to announce the adoption of a corporation's bylaws formally. This document, signed by the incorporator, also attests to the election of particular persons to the corporation's original board of directors. After their successors have been chosen, the original board members may be replaced.
  • Model Business Company Act (MBCA): When forming a company in a state that follows the Model Business Company Act (MBCA), incorporators must carefully analyze all of the statute's requirements. They must assess whether the articles of incorporation comply with these requirements. Incorporators are only permitted to sign and submit the form after confirming compliance.
  • Meeting Objectives: The incorporator may preside over an organizational meeting after filing the articles of incorporation. Normally, this meeting requires three days' notice in advance. This meeting might be held to update the articles of incorporation (followed by formal notification to the state, particularly if the registered agent changed). It can also be held to draft and approve bylaws or choose the board of directors' members.
  • Sharing the Issuance and Stock Structure Decisions: Share issuance and stock structure decisions must be implemented. The number of authorized shares and how many will be distributed to the founders and potential investors must be determined by incorporators.
  • Exit Strategy: While not immediately applicable, incorporators should examine prospective exit strategies such as mergers, acquisitions, or initial public offers (IPOs), as these decisions may have long-term implications for the corporation's trajectory.

Functions of an Incorporator

The duties and role of an incorporator are described as follows:

  • Negotiating the Incorporation Process: A business incorporator's role is to understand and negotiate the incorporation procedure in accordance with the state's unique requirements. To establish a corporation as a distinct legal entity, incorporators are in charge of drafting and submitting the necessary paperwork. This paperwork includes the Articles of Incorporation.
  • Submitting the Articles of Incorporation: Acquisition of the essential data and submission of the articles of incorporation are the incorporator's main responsibilities. The corporation submits an application in the form of this document, generally referred to as the Certificate of Incorporation. It allows the organization to operate its business in the state lawfully.
  • Signing the Articles of Incorporation: The incorporator must sign the articles of incorporation, which serve as a charter recognizing the corporation's creation. This document is generally filed with the Secretary of State's Office in the state where the corporation is registered.
  • Supplying Information to Accomplish the Articles of Incorporation: The incorporator gathers and supplies particular information required to complete the articles of incorporation. Typically, this information includes the corporation's name, address, registered agent, stock or non-stock basis, incorporator, and board of directors.
  • Adhering to the Payment Procedure: After gathering and preparing the necessary papers, the incorporator submits the form and the filing fee. This form is submitted to the Secretary of State or the applicable state entity in charge of corporate registrations. Once approved, this completes the filing process, and the corporation is legally recognized as a separate entity from its owners.
  • Selecting Board Members: The incorporator may identify and select members to serve on the initial board of directors. These personnel will be in charge of overseeing the corporation's management and decision-making.
  • Organizing the First Board Meeting: The incorporator can lead and plan the initial board meeting. The original directors must attend this important meeting to debate and establish corporate policies. The directors must also specify duties and responsibilities and make key decisions on the corporation's management.
  • Establishing the Corporation's Bylaws: Adopting the corporation's bylaws frequently involves the incorporator. A corporation's bylaws, rules, and regulations govern its internal affairs and business operations. They cover a wide range of themes, including shareholder duties and rights, the makeup of the board of directors, meeting procedures, and corporate governance.
  • Obtaining Approval and Licensing: The incorporator may obtain a copy of the articles of incorporation when the Secretary of State has authorized them. The incorporator might also be involved in the licensing procedure, where certain states require corporations to provide a copy of the articles of incorporation and the names of all incorporators.
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Key Terms for Incorporators

  • Articles of Incorporation: The legal document must be filed with the appropriate government entity to establish a corporation officially.
  • Bylaws: A set of guidelines governing a corporation's internal management, operations, and decision-making processes is known as its bylaws.
  • Board of Directors: A board of directors is a body that has been chosen or appointed to supervise a company's management and strategic choices.
  • Initial Board Meeting: The initial meeting of a company's board of directors following its establishment.
  • Shareholders: Owners of equity in a corporation are known as shareholders, who can be either people or organizations.
  • Corporate Governance: The rules, practices, and processes that direct, control, and manage a corporation. It includes the interactions between shareholders, the board of directors, other stakeholders, etc.
  • Certificate of Incorporation: When the Articles of Incorporation are approved, the state or other jurisdiction issues a certificate attesting to the legal formation and existence of the corporation.

Final Thoughts on Incorporators

An incorporator is responsible for selecting board members, organizing inaugural meetings, and enacting bylaws while establishing a corporation. Their responsibilities may differ according to the jurisdiction and the firm's demands. Adhering to the laws and requirements of the jurisdiction in which they are incorporating is a legal and administrative obligation for incorporators. This might involve submitting the required papers, electing the first directors, and fulfilling tax and reporting requirements. The incorporator's formal responsibilities normally terminate after the corporation is registered. In most cases, ongoing management is transferred to the board of directors and officers. After the corporation is established, the board of directors and officers normally take over the incorporator's duties and take on continuous administration and decision-making duties.

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