A few years ago , I asked a ( former ) friend of mine to incorporate my company for me . He filed the articles of incorporation , but we never did anything else as far as formalities go . The corporation has no bylaws , officers , directors , etc . I'm trying to clean up the corporation's operations , and from my research I know that I should start by getting bylaws adopted and appointing myself as the director . How do I appoint myself as the director without involving my former friend , who I no longer talk to ? From the research I've done , it looks like it's usually the incorporator who appoints the directors . BTW , I'm the only shareholder . Can the shareholders appoint the first director ? Thanks in advance .
Edit: Mr. Zeppos brings up an interesting point. Can I even do a shareholder resolution if the company didn't issue shares yet? I mean, I was meant to be the only shareholder, but I don't technically have shares in my hand yet. Is seeking out the incorporator my only option?
When you say "he filed the articles off incorporation", I presume you mean he was the "incorporator" and he signed the Articles when they were filed. Did he resign and appoint a director? You say that the corporation has no bylaws, officers or directors. If so, typically, the incorporator needs to appoint a director or directors. From there, a first meeting of directors is held, bylaws are adopted, and shares are issued.
You mention that you are the 'only shareholder'. I don't think you were ever issued shares, since directors were not appointed, and he never resigned as the incorporator. As a sidebar, yes, shareholders elect the directors, and the directors then elect officers. The directors will also issue shares. Your problem is that you haven't stated how you were properly issued shares.
Assuming you can speak with your friend, have him appoint the directors, resign as the incorporator, and then issue yourself shares so can get move forward and take control of the Company. But the key thing is to get the incorporator to appoint you (presumably) as the sold director, and then, appoint yourself as the President, Secretary, and Treasurer, and then issue shares to yourself (to capitalize the Company) for your investment. Now you have full control as the sole shareholder, director, and officer.
Your friend was the incorporator and after the first meeting of shareholders has no further role. Have a paper shareholder meeting with yourself, appoint yourself director, have a paper director's meeting with yourself, where you appoint yourself as President, Secretary, and Treasurer. File your statement of information and issue your shares, and pay your franchise tax and you should be good to go.
However,before the above, make sure the corporation has not been suspended for failure to file Statements of Information or Franchise Tax in the past. In those cases it may be cheaper to form a new ciorporation.
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Generally, the shareholders vote to appoint the directors. The incorporator starts up the company and holds its organizational meeting, where the by-laws are adopted and approved. Since the only shareholder is yourself, you should be able to vote yourself a set of bylaws and yourself as the sole officer and director.
It all depends on whether your articles of incorporation named you as one of the initial directors. I'm assuming that they didn't, because if so, you would have had to sign the articles before filing.
If my assumption is correct, you will unfortunately have to reach out to your former friend, the incorporator, in order to perfect the organization of your corporation. Where the articles do not name the initial directors, the incorporator assumes full responsibility over the corporation. This includes the power to name the initial directors and officers, and to adopt bylaws. Until the incorporator does these things, he is indispensable.
This outcome is precisely why, in my practice, I draft the articles to include the names of the initial directors. This removes the incorporator from the equation as soon as possible, so the directors can assume responsibility at the earliest opportunity.
Sorry to relay bad news. Mistakes in the formative stages of a corporation can be crippling, which is why it's so important to have legal counsel assist. If you can't or won't talk with your former friend, your only recourse may be to set up anew, unless my colleagues can advance a better suggestion.
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After reading my colleagues' answers and your additional information, I have the following thoughts:
First, it does appear that reaching out to the incorporator - assuming he is cooperative - will be the easiest approach.
Second, reading between the lines I wonder whether the corporation has been engaged in a business, whether you have been entering into agreements on the corporation's behalf, etc. If so, clean-up may be more complicated than you realize and may require that you obtain a lawyer's assistance.
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I agree with my several colleagues. You need to establish the "paper trail" to assure that you are the only shareholder (who can confirm your prior election as the only director) and/or that you're the only director (who can confirm issuance to you of shares). The "gap" in that paper trail sounds like it might be what, if anything, your friend did as "Incorporator"; if the answer is nothing, there will always be some level of a problem unless you can get your friend to cooperate with the simplest statement of appointment of you as a director. First step: do a business search on thw CA Secretary of State's website to see what's on record.
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