U.S. INCORPORATION CHECKLIST

David D. Spencer
1621 Lake Mount Drive
Snohomish, Washington 98290-1730
Tel 360.862.9101 or 206.650.7048
Fax 206.508.3999
Email:  spencer@davidspencerlaw.com

© David D. Spencer All rights reserved

Significant time may be saved by a new business venture if some consideration in advance is given to the formation of the business entity.  This checklist is a guide for the type of information and decisions that will make the forming of a corporation smoother and less distracting for managers and executives.  This checklist assumes that the organizers of the new business have chosen to form a corporation.

Although this checklist is based on the law of the State of Washington, it is general enough to apply to incorporation in other states as well, such as Delaware.  Note, however, that each state may have unique provisions in its corporations statute.

This checklist is not intended as legal advice, nor does its use by the reader constitute or imply an attorney-client relationship with the author.  Each incorporation matter is unique and should receive the attention of qualified counsel who will apply the law to the facts at hand.

I. CONTACT INFORMATION FOR ORGANIZERS AND INITIAL SHAREHOLDERS

Provide contact information for each person or entity that is an organizer or initial shareholder for the new corporation. This information should include names, addresses, telephone and fax numbers, email addresses and web site(s) (if any).

_________________________________________
_________________________________________
_________________________________________
_________________________________________

II. CONTACT INFORMATION FOR THE ENTITY

Provide contact information for the new corporation (i.e. business address, telephone and fax numbers, email addresses and web site(s), if any).

__________________________________________
__________________________________________
__________________________________________

III. COMMUNICATIONS WITH THE LAWYER AND OTHER ADVISORS

To avoid confusion and delay, the lawyer and any other outside advisors to the entity, such as accountants, should know who is authorized to communicate with him or her on behalf of the new corporation. Provide the name and contact information for a primary designated contact person and a secondary or back-up contact person.

Primary Contact Person and Contact Information:

_______________________________________________
_______________________________________________

Back-Up Contact Person and Contact Information:

_______________________________________________
_______________________________________________

IV. THE ARTICLES OF INCORPORATION

The primary charter documents of the new corporation will be its articles of incorporation and its bylaws. Certain matters must be addressed in the articles, which are filed with the Washington Secretary of State and are a public record.

First Choice for Corporate Name:_______________________

Second Choice for Corporate Name:_______________________

The lawyer can determine name availability and reserve the name, if desired. This can also be done by the client, often over the internet at the web site of the Secretary of State.

Purpose Clause for the Articles:

Washington law provides that every corporation incorporated under the Business Corporation Act has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation. If a more limited purpose is stated in the articles, the activities of the corporation will be restricted to that purpose.

Use General Purpose Clause: [ ]

Specific Purpose Clause (if desired): ________________________________________________________
________________________________________________________

Authorized Capital Stock:

____________ Common Shares

$___________ Par Value (not required)

[ ] Blank check preferred (i.e., subject to future determinations by the Board), with __________ preferred shares authorized

Other __________

Consider thin capitalization problems. The U.S. Internal Revenue Service may disallow deductions. Evaluate use of debt in capital structure. Be aware of requirements of securities laws and need for investment letters, Blue Sky and Federal Securities exemptions.

Indemnification of Directors: [ ] Yes [ ] No

Limitation of Director Liability: [ ] Yes [ ] No

Number of Directors: _____________________

Names and Addresses of Initial Board of Directors:

___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________

Registered Office and Registered Agent:

[ ] Corporation [ ] Outside Service, e.g. CT Corporation System [ ] Attorney [ ] Other

Name and Address of Incorporator:

_______________________________________________
_______________________________________________
_______________________________________________

Optional Provisions:

Preemptive Rights [ ] Yes [ ] No Cumulative Voting [ ] Yes [ ] No Special Control Provisions [ ] Describe: ___________________________________________________
___________________________________________________
___________________________________________________

Provision for Approval by Consent of Majority of Shareholders:

[ ] Yes [ ] No

V. THE BYLAWS

Date and time of Annual Meeting: ____________________________

Fiscal Year: ______________________________________________

Is indemnification clause necessary to correspond with Articles: [ ] Yes [ ] No

VI. THE ORGANIZATIONAL MINUTES

[ ] By Meeting: Date: ______________; Hour: _________; Place: ___________________________________ Persons attending: _______________________

[ ] By Consent: Date: __________________

Compensation of Officers:

Compensation of Directors:

Officers:

Chairman of the Board _________________________ President______________________________________ Vice President ________________________________ Secretary _____________________________________ Treasurer _____________________________________

Subchapter S Election: [ ] Yes [ ] No

Particularly useful for start-up losses. Requirements: Domestic corporation, maximum of 75 shareholders (who must be individuals who are citizens or residents of the U.S., estates and certain trusts and charities and cannot be regular “C” corporations or partnerships), one class of stock outstanding, December 31 fiscal year end unless there is a valid business purpose for some other year end.

Stock Subscriptions

All stock to bear restrictive legend unless otherwise stated. NOTE: If purchase price is other than cash, resolution of directors must state equivalent cash value.

Name..........No. of Shares.........Purchase Price

List of Assets Transferred to the Corporation:

Asset

Basis

$
$
$
$
$

List of Liabilities Assumed by the Corporation:

Liability

Amount

$
$
$
$
$

Note that if the liabilities assumed by the corporation exceed the basis of assets transferred to it, IRC 357 may apply.

Banking Resolutions:

Name and Branch of Bank: ____________________________________ Authorized Signatures: _______________________________________ (Obtain copy of bank’s forms: [ ] Deposits [ ] Borrowing)

Other Matters:

[ ] Approval of Leases or Contracts ___________________ [ ] Ratification of Preincorporation Activities [ ] Other __________________________________________________

Accountant Contact Information:

_________________________________________
_________________________________________
_________________________________________

Trade Name:

Name to be used by Corporation: _________________________________ File Certificate of Trade Name: [ ] Yes [ ] No

Qualification to do Business in Other States:

Based on the nature of business to be conducted in other states qualification may be necessary or desirable. Immediate qualification in following states: ______________

Application for Various State and Federal Licenses and Registrations:

Form SS-4 (Federal Employer I.D. Number) to be filed by:

[ ] Corporate Officer [ ] Attorney [ ] Accountant

Social Security Number of Principal Officer of Corporation (required by Form SS-4): ________________________.

S Election (IRS Form 2553), if desired, to be filed by: [ ] Corporate Officer [ ] Attorney [ ] Accountant:

Form 2553 requires the Social Security Number of Shareholders and Spouses:

_____________________ SSN:____________________ _____________________ SSN:______________________ _____________________ SSN:_______________________ _____________________ SSN:_______________________

Master Business License (State of Washington) to be filed by:

[ ] Corporate Officer [ ] Attorney [ ] Accountant

City Business License and Other Licenses (as required) to be filed by:

[ ] Corporate Officer [ ] Attorney [ ] Accountant

Corporate Seal (if desired) to be ordered by:

[ ] Corporation [ ] Attorney [ ] Accountant