Frequently Asked Questions as you complete your New Business Worksheet:
Name: If you will be dealing with the public, think about a name that will represent your product or services and be easy to remember. Try to imagine the name in a magazine ad or radio commercial. NOTE: Names consisting of initials are the most likely to get rejected by the Secretary of State.
Second Choice Name: This is in case the Secretary of State rejects the first name because someone else is already using it or has a name too close to it. Because of this, a minor variation of the first name is usually not helpful in acquiring a name. (Rubber Duckie Inc. to Rubber Ducky LLC. or Rubber Duckies LLC.) The second choice name should be different enough from the first name that the Secretary of State considers it unique. (Rubber Duckie LLC. to Bright Yellow Duckies LLC.)
****IMPORTANT NOTE REGARDING NAME: The name you applied for is not yours until your Articles of Incorporation or Certificate of Organization come back stamped from the Secretary of State. Even if we get an emailed confirmation that the name is available, it is possible and in fact has happened that someone else files and receives that name in the short time it takes to mail in the Articles. Do not order business cards, letterheads, or any material with the name of the company until you receive the official stamped Articles back from the Secretary of State. Even if you have been using that name, have a website, have purchased a domain with that name, have opened a checking account – none of those things affect whether or not the name is yours according to the State.
Members/Officers: The members and officers can be the same people, but they don’t have to be. One person can hold more than one office (Vice President and Treasurer, for example). It’s also ok for one person to be the only member and the only officer of the corporation. All the offices don’t have to be filled, but we do recommend a president and secretary at the minimum. These can be the same person.
Stock: The shares of stock the corporation is authorized to issue are the total number that can ever be sold in the lifetime of the company. We generally recommend 10,000 at a par value of $1.00 per share.
The shares of stock purchased by the shareholders at the time of incorporation can be any amount up to the total authorized. Stock can be held back for future use – to sell to raise capital, to give as a gift, or so current stockholders can purchase additional shares.
For instance, ABC corporation authorizes 10,000 shares. It has two shareholders at the time of incorporation who each purchase 1,000 shares at the par value of $1.00 per share. The company now has $2,000 cash and 8,000 shares remaining to sell or distribute in the future.
Board of Directors/Officers: The directors and officers can be the same people, but they don’t have to be. They can be the shareholders, but they don’t have to be. One person can hold more than one office (Vice President and Treasurer, for example). It’s also ok for one person to be the only board member and the only officer of the corporation. All the offices don’t have to be filled, but we do recommend a president and secretary at the minimum. These can be the same person.