Incorporating Is the Easy Part

Incorporating a company is fast and inexpensive. You can do it online in an afternoon. That is exactly why so many business owners assume the job is done once the certificate of incorporation comes back. It is not.

Incorporation vs Organization

Incorporation creates the legal entity. Organization is what turns that entity into a corporation that actually works. Until a company is organized, it has no rules governing its operations and, in many cases, no record of who owns it.

What Proper Organization Includes

Properly organizing a corporation typically includes:

i. Bylaws: The internal rulebook for how the company is governed and how decisions get made.

ii. Director and officer appointments: Confirming who runs the company and in what capacity.

iii. Share issuances: Actually issuing shares to the owners, so there is a clear record of who owns what.

iv. Subscription documents and share certificates: The paper trail that backs up that ownership.

v. Corporate registers and minute book: The official records every corporation is required to maintain.

Why It Gets Skipped (And Why That's Risky)

None of this is glamorous, and that is precisely why it gets skipped. The problem is that an unorganized company looks fine right up until the moment it matters, and by then it is usually expensive to fix.

Not Sure If You're Properly Organized?

If you have incorporated but are unsure whether your company was properly organized, reach out. It is far easier to set this up correctly at the start than to reconstruct it later.

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This article is for general informational purposes only and does not constitute legal advice. It does not create a solicitor-client relationship and should not be relied upon as a substitute for advice tailored to your specific transaction or circumstances. For expert guidance, feel free to contact Outsiders Law.