Getting a corporate charter
Dear Karen: I’m setting up my corporation. How do my partner and I issue stock, register our corporate name and establish our charter?
Answer: When you file articles of incorporation with the secretary of state’s office, you’ll be registering your name and establishing a charter. Information is available at www.sos.ca .gov/business/bpd_forms.htm.
The same site allows you to check preliminary availability of your desired corporate name before filing, said Los Angeles attorney C. Dickinson Hill. “The database runs several weeks old and includes only names registered with the California secretary of state, not names that may be used in other states, even if owners of those names have federal trademark rights,” he said.
There is a $100 filing fee. If you file online or by mail, you will wait more than a month to hear whether your articles were accepted, Hill said.
“Since you will need them to open a bank account, obtain a federal employer ID number and obtain a seller’s permit from the state Board of Equalization, consider filing over the counter in Sacramento or at a regional office,” he said. “This will cost $15 extra, plus the service-company fee, but you will get the articles back in about a week.”
Typically, you and your co-owner will comprise the board of directors, and that board will issue stock. The company must also file a notice with the California Department of Corporations: www.corp.ca.gov/loen /default.asp.
Keeping family ventures happy
Dear Karen: My brothers have recently joined the company my father and I have been running for five years. How do we get along smoothly?
Answer: Family businesses often need to add structure that is missing in entrepreneurial companies, said Laura Colin, author with her husband, Larry, of “Family, Inc.” “Develop a code of conduct about how you’ll function as a team. Decide to disagree in private and go forward with one voice in public. Meet as a group to discuss problems. Review compensation and responsibilities annually,” she said.
Avoid any perception of inequity, Larry Colin said. “Decide how to decide: Maybe one of you will have the final say. Or maybe you’ll go by majority vote, or hire an outside advisor who breaks impasses.”
Networking leads to investment
Dear Karen: How can I secure more resources for business growth? I want to reach professional investors, potential partners and lenders.
Answer: Successful banking and business finance is as much about forming relationships as it is about the health of your balance sheet, said Christian Kramer, regional director USA of Lloyds TSB International in Los Angeles. With the credit crunch, you’ll need to double your networking.
“Join professional and trade organizations and make a point to attend mixers and special events. The key to networking is aligning your contacts with your goals,” Kramer said. This means joining groups that attract people with money to invest.
“After an event, always follow up on actions promised, deliver what you have agreed and be reliable. Overall, remaining upbeat, positive and committed to your venture is the major ingredient to enlisting financial partners,” he said.
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Got a question about running or starting a small enterprise? E-mail it to karen.e.klein@ latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.
