If you’re thinking of starting a new Georgia Corporation, the first thing you should have in mind is how to file with the Secretary of State the articles of incorporation. As you may know, the articles are the initial paperwork which establishes your corporation with the State of Georgia. Requirements of doing so are in Georgia statutes OCGA 14-2-202.
Some of the requirements are mandatory under OCGA 14-2-202 and others are merely optional.
As far as the mandatory requirements, the articles must contain the following information:
- Your corporate name. It is usually followed by the wording: Corporation, Inc. or Limited.
- The number of shares the Corporation is authorized to issue. Authorized shares mean the total amount of shares that can be issued over time in the future. In other words, if you authorized 100,000 shares, you can decide the issue 50,000 at this point, and keep the rest for additional partners or investors. For smaller corporations, it would make sense to have more than 1 million.
- The address of the corporation’s initial registered office and initial registered agent. The initial registered office is typically the principal place of business. It can be an actual business address or in someone’s home. Both it should be within the State of Georgia. You cannot use a post office box for the address. On the other hand, you can use mailbox or drop services for the address. Or alternatively, you can hire a local registered agent. The purpose of the registered agent is to have someone who can be served in the event there a lawsuit against the Corporation. And alternatively, how the Secretary of State may contact you for certain business.
- The name and address of each incorporator. It is not uncommon to have one person as the initial incorporator, even though there is more than one partner.
On the other hand, the following information is merely optional under OCGA 14-2-102:
- The names and addresses of the individuals who will serve as the initial directors. You will be having your first meeting of directors shortly after formation and that is where each of information for the directors will be present. However, that initial meeting and resolutions need not be filed with the Secretary of State.
- The purpose of the Corporation. Usually, people simply state: “Any business lawfully entitled to conduct in the State of Georgia .”
- The par value of the shares of stock. The par value is the approximate value of each share of stock. So, if you had 20,000 shares issued at one dollar par value, the value the shares would be $20,000.
- Probably one of the most important optional provisions is limiting the liability of the shareholders and directors for acts or omissions done in the course and scope of the corporate business. Under Georgia law, you can limit their liability. But, the following exceptions apply: misappropriating a corporate opportunity, intentional misconduct, a knowing violation of the law, or a transaction in which a director receives an improper personal benefit. Basically, a director is immune from liability if that person to the best of his or her knowledge, is acting in the best interest of the Corporation.
Check with the Secretary of State, because sometimes you can do the filing right online.
What is the next step? Bear in mind that a corporation will insulate you from personal liability as long as you observe corporate formalities. This means having the required meetings, minutes, and resolutions. The first thing you need to do is to create a minute book and have your first meeting of shareholders in which the directors are elected. It is usually for one year terms. Then immediately thereafter you will have the first meeting of directors. One of the matters they will accomplish initially is the appointment of all the officers, including a president, vice president, secretary and treasurer. Other items on the agenda would be a CPA, corporate attorney, bank account, subchapter S election, and other matters.
The good news is you can do this by phone conference so that everybody does not have to physically travel to one office. And, most people use a waiver of notice form so that a formal notice of the meeting or agenda is not have to be mailed out.