Let’s get familiar with Post-incorporation.
You formed your new company, but what happens next?
Post Incorporation is a series of steps and proceedings that need to be taken care of after you formed your company and finished the necessary incorporation steps. Post Incorporation is a very important part of American corporate law and company forming system. Because of its complicated nature and importance, it is always suggested that Post Incorporation should be done with specialized consultants. It should be remembered that, as simple and easy incorporation is, post-incorporation is extremely detailed and complicated.
Why is Post Incorporation Important?
Unlike a public limited company which requires a trading certificate, a private limited company can commence business immediately. However, certain matters do still need to be dealt with. Every type of private corporation and startup in the scope of the American legal system needs to complete their Post Incorporation after they finished their Incorporation proceedings to further establish their corporate body. Any corporate work without the post-incorporation procedures will have many problems along the way and won’t be able to accomplish the simplest corporate tasks.
1. First Meeting
One of the first steps companies take after they are newly formed is the first board meeting and adopting a company by law.
In the early stages of your new company, the directors shall convene the first board meeting or pass the first board resolution relating to the “organization” of the company which should include:
- Adopting the Constitution that governs the internal operations of the company
- Adopting the use of a company seal
- Authorizing the issuance of shares and other types of securities
- Appointing officers
- Confirming the registered office address
- Confirming the first financial year-end
- Appointing an auditor, if required
- Making banking arrangements
- Taking care of any other business
2. Official Address
A company shall have a registered office within 15 days from the date of incorporation. This address shall be used to receive all official communication from various authorities. The company shall inform the same to the registrar within 30 days from the date of incorporation.
3. Open a Bank Account
Setting up a business entity is important to protect the stockholders from personal liability for liabilities of the business. The concept of limitations on liability are respected, founders should set up a bank account in the name of the company and use these accounts for all payments made by, or to the company.
4. Apply for an EIN
Employee Identification Number, or EIN, is a unique number that identifies your business by the Internal Revenue Service (IRS). It is required to open a bank account, hire employees, and file tax returns.
If you are planning to hire employees or open a company bank account, you will need it. In many ways, it is like a business’s social security number.
5. Issue Your Initial Equity
It is necessary to granting initial equity soon after you incorporate your business. By keeping your financial matters straight, you will be able to save time and money later on. Anytime an equity grant is subject to vesting, you may also consider making an 83(b) filing for that grant.
So, as it is if you postpone your post-incorporation it is near as like you formed and “half” or “unfinished” company. That is why post incorporation proceedings should not be passed by and should be done as soon as possible after incorporation complete. If you passed post-corporation after your incorporation, you should not worry and waste time about the consequences and just finish the post corporation as fast as possible.
