Now that you’re done incorporating, it is time to get down to business. Tackle these 13 tasks after incorporation and keep your company on track and pointed in the right direction.
Organize the Corporation and Meet Its Deadlines.
Make sure that all of the incorporation documents are signed, scanned and organized for quick access. Ask your counsel for a calendar of near term deadlines and filings. For example, obtain the company's Employer Identification Number (EIN) right away - you will need it to open a bank account and for certain regulatory filings. Meet the other upcoming filing deadlines after incorporation: local business license (15 days); securities law filings (15 days); IRC Section 83(b) Election if stock vesting (30 days - don't miss this one!); Subchapter S-corp election, as applicable (75 days); and, if in California, the Statement of Information (90 days). Qualify as a foreign corporation in the state where the new corporation will conduct its business if different than the state of incorporation.
Build and Protect Your Core Intellectual Property.
Protect your company's intellectual property (IP) early and securely. Confirm whether and to what extent the founders are bound by confidentiality and/or disclosure obligations to others (e.g., former employers). Capture existing IP at the time of corporate formation by having all founders execute contribution agreements. Capture ongoing IP creation and development by having all employees and consultants execute proprietary information agreements. Consult with experienced patent and trademark counsel depending on the intellectual property, technologies and business plans of your company. Remember patent protection is based on first to file now.
Create the Equity Capitalization Table.
You need to keep track of who owns the company. Stay on top of this equity ownership information and keep it squeaky clean. Make sure you understand your company's capitalization; ask your lawyer to explain it again if you are uncertain. Ensure that all commitments relating to your company's equity ownership are in writing and be precise (and careful) while discussing capitalization matters with others. You will be happy that you have done so when you start raising money from investors or down the road when an acquirer comes knocking.
Open a Bank Account.
Set up a PayPal account as well as a business banking account, which should be opened in the company's name and never used for personal expenses. Get a company credit card and Square. The new corporation will also need to maintain its operations and financial affairs separate and apart from the stockholders' personal activities.
Get Ready for Employees.
Register with the state as an employer (e.g., with the Employment Development Department in California). Get ready for payroll (check out Gusto) and benefits with outsourced or online options. Develop an employee on-board process with proper HR documents (e.g., offer letter, proprietary information and invention assignment agreement, etc.) An employee handbook will be needed soon.
The new corporation provides limited liability protection to its stockholders, but it will need additional risk protection, particularly as it starts to operate and form relationships with other businesses or individuals. Contact an experienced insurance broker who can help you assess the risks applicable to your business and the proper types of insurance now and in the future.
Outsource When Necessary.
Hire a CPA. Set up your accounting software. Use an outsourced bookkeeper. Do what you do best and outsource the rest.
Assemble Your Legal Toolkit.
Compensate Employees with Equity.
Set up a stock option plan to provide equity incentives to employees and consultants and impose appropriate vesting conditions to further align incentives with the company. Get help so that your company follows and complies with the various corporate, securities law and tax considerations. Obtain a "409A" valuation before granting stock options. Consider restricted stock grants as an alternative. Map out the equity grants to be made so that you use the stock option pool wisely.
Form an Advisory Board.
Advisory boards can be a major asset to your company provided that you are thoughtful about choosing only those advisors that are committed to helping your company become succesful. Put your advisors to work and manage their activities to get more value for the company (versus limited value as inactive window dressing on the company's website). All advisors enter into an advisory board member agreement with the company in order to set expectations and protect the company's secret sauce. Advisors typically receive small stock option grants (and sometimes cash down the road).
Get your website online and secure your company's social media channels. Consider outsourced assistance, but stay involved and make consistent efforts to ensure progress.
Buy or lease computers, printers, scanners and learn how cloud software and services can benefit your business. Invest time and effort early on in setting up customer relationship management (CRM) and task management software (and continue using them). Backup your data regularly and with redundancy. Look into Internet-based phone systems (much improved). Network to find a great technology consultant to keep the IT up and running.
Get and Stay Organized.
Centralize document management for control and collaboration opportunities. Make sure that your documents are ready for due diligence. Organize the documents on a cloud service like Box.com. Scan documents like crazy and use a consistent document naming convention to organize and find documents more easily. Be sure to plan and prioritize these tasks in the way that best suits your business. And don't forget to get out there and make some sales and bring home some revenue!
Additional resources provided by the author
Did you like what you read? Check out our website for more tips to start, fund and grow your business.
Our Rating is calculated using information the lawyer has included on
their profile in addition to the information we collect from state
bar associations and other organizations that license legal
professionals. Attorneys who claim their profiles and provide Avvo
with more information tend to have a higher rating than those who do
What determines Avvo Rating?
Experience & background
Years licensed, work experience, education
Legal community recognition
Peer endorsements, associations, awards
Legal thought leadership
Publications, speaking engagements
This lawyer was disciplined by a state licensing authority in .
Disciplinary information may not be comprehensive, or updated. We recommend that you always check a lawyer's disciplinary status with their respective state bar association before hiring them.