Filing a certificate of incorporation in New York is the beginning point of a corporation, see Section 402 Business Corporation Law. Unfortunately, this is where it often ends for many small business owners. Too many small business owners neglect the additional paperwork that is needed to keep the corporate house in order and keep the corporate shield of limited liability intact.
While no fancy leather-bound binder and seal is required, one should have some sort of binder with the following tabs and papers:
1. Articles/Certificate of Incorporation
1. Articles/Certificate of IncorporationUnder this tab, in New York, one files the certificate of incorporation. This is a public document and anybody can order a copy to look at it. Along with with the certificate of incorporation, you should file the filing receipt, which you received from the Division of Corporations right after filing the certificate or the articles.
2. Bylaws
2. BylawsEach corporation must have by-laws, see Section 601 Business Corporation Law, which are the rules that govern the inner workings of the corporation; how many officers/directors are allowed, how are they elected/removed; how are meetings of shareholders to be conducted…and so forth. The by-laws of a corporation are not public, but they must be in your corporate binder. If against my advice, you used a non-attorney formation service, they may have sent you a set of standard by-laws, which may or may not be all you need.
3. Minutes
3. MinutesThe tab called minutes should contain all records relating to shareholder meetings or consents and director meetings or consents. At a minimum, at the start of the corporation, it should have papers documenting the “organizational meeting”, see Section 404 Business Corporation Law. This is where the “incorporator”, the person who signed the certificate of incorporation and filed it in Albany does certain things: Adopts By-laws of the corporation and appoints the first director(s) of the corporation. This “meeting” can be done in writing and be a one-page document signed by the incorporator.
Then there should be minutes of the first meeting of the directors, where the directors approve the actions of the incorporator, decide to open a bank account, authorize the issuance of shares…and so forth.
As the corporation lives on, this tab will also hold all annual shareholder and director meeting minutes and any other meetings where the corporation made certain decisions through its directors and shareholders.
4. Stock Certificates
4. Stock CertificatesA stock certificate showing your name on it is very good evidence (prima facie) that you own a piece of the corporation. If you are the sole owner of the company, you can put your stock certificate here. This tab will also hold blank certificates that can be issued to new shareholders at a later time. While not having a stock certificate does not exclude you from being an owner of a corporation, having to establish ownership with other evidence can be costly and difficult, see “Shares were never issued, can you still be an Owner?“
5. Stock Transfer Ledger
5. Stock Transfer LedgerA Stock Ledger is a register that tracks any issuance of stock, by listing the number of shares issued, date of issuance or transfer, the name and address of the shareholders, and so forth.
**This post is for informational purposes only, For legal advice contact a business lawyer**
