When starting a company, it’s important to consider the optional provisions that should be included in your Certificate of Incorporation. In a Delaware LLC, only the registered agent and the name of the company need to be listed. However, for a corporation, the Certificate of Incorporation must list the agent, authorized shares of stock, par value of those shares, and several other optional provisions to ensure legality. For example, at IncNow, we include a provision under 102D7 that allows directors to be indemnified if they act in good faith. It’s crucial to include these provisions, as failing to do so means you won’t have access to them. With us, you can be assured that we will include the most popular additional options on your Certificate of Incorporation, providing everything you need to get your company started smoothly.
Optional Provisions in a Delaware LLC
Registered agent
When forming a Delaware Limited Liability Company (LLC), one of the optional provisions to consider is appointing a registered agent. A registered agent is a designated individual or entity responsible for receiving legal documents on behalf of the LLC. This includes important correspondence such as lawsuits, tax notices, and other official notifications. Having a registered agent ensures that the LLC stays compliant with state regulations and avoids any potential difficulties associated with missed deadlines or failure to respond to legal matters promptly.
Company name
Another important optional provision for a Delaware LLC is the inclusion of the company name in the formation documents. While it may seem obvious, it’s crucial to correctly list the name of the company in order to establish its legal identity. This provision ensures that the LLC is properly registered under its chosen name and can operate under that name in all business transactions.
Optional Provisions in a Corporation
Registered agent
Similar to a Delaware LLC, a corporation is required to appoint a registered agent who serves as the official point of contact for receiving legal documents and notifications. This provision ensures that the corporation stays informed about any legal matters and can respond appropriately within the required time frames.
Authorized shares of stock
When forming a corporation in Delaware, it is necessary to specify the number of authorized shares of stock in the Certificate of Incorporation. This provision determines the maximum number of shares that the corporation can issue to shareholders. It is important to carefully consider the number of authorized shares to ensure that it meets the needs of the corporation both in the present and in the future.
Par value of shares
In addition to specifying the number of authorized shares, the par value of shares is another optional provision for a Delaware corporation. The par value represents the minimum price at which a share of stock can be issued or sold. Including the par value in the Certificate of Incorporation is important for financial and accounting purposes, as it affects the company’s valuation and shareholder rights.
Indemnification Provision
Inclusion of provision under 102D7
One crucial optional provision in the Certificate of Incorporation is the inclusion of an indemnification provision under Section 102D7. This provision allows directors of the corporation to be indemnified if they act in good faith while carrying out their duties. In other words, the company can provide legal and financial protection to its directors if they face legal actions or liabilities arising from their role as directors.
Directors can be indemnified if acting in good faith
By including this provision, directors can have peace of mind knowing that they can be protected from potential personal liability when fulfilling their responsibilities. This provision reinforces the importance of acting in good faith and allows directors to make decisions without the fear of individual legal repercussions.
Consequences of Not Including Indemnification Provision
Loss of indemnification rights
Failing to include the indemnification provision in the Certificate of Incorporation means that the directors may not be entitled to indemnification from the company. This omission can have significant consequences in situations where legal actions or liabilities arise, leaving the directors personally responsible for any legal costs or damages incurred. By not including this provision, directors may potentially expose themselves to unnecessary risks and liabilities.
Director-Amended Bylaws Provision
Optional provision allowing directors to amend bylaws
Another optional provision that can be included in the Certificate of Incorporation is the director-amended bylaws provision. This provision allows the board of directors to modify the corporation’s bylaws without seeking shareholder approval. By giving directors the authority to amend the bylaws, this provision enables the corporation to adapt more quickly to changing circumstances and business needs. It provides flexibility and efficiency in making necessary changes to the company’s internal rules and regulations.
Omission of Director-Amended Bylaws Provision on State Form
The standard state form with the secretary of state does not include this provision
It is important to note that the standard form provided by the state of Delaware for incorporating a corporation does not include the director-amended bylaws provision. This means that if the standard form is used, the directors would need to obtain shareholder approval for any amendments to the bylaws. This may result in potential delays and limitations in making necessary changes to the bylaws.
Benefits of Forming a Company with Us
Inclusion of popular additional options on the Certificate of Incorporation
When forming a company with us, we offer the advantage of including popular additional options on the Certificate of Incorporation. By including these provisions, you can customize your company’s formation documents to meet your specific needs and preferences. Our experience and expertise in corporate formations ensure that you have access to the most common and useful options available under Delaware law. This allows you to establish a strong foundation for your company’s operations from the start.
Availability of necessary provisions to start the company
By choosing to form your company with us, you can be confident that all necessary provisions will be included in the formation documents. This ensures that your company meets all legal requirements and can operate smoothly from its inception. We understand the importance of having a comprehensive and properly structured Certificate of Incorporation that contains the relevant optional provisions. Our goal is to provide you with the necessary tools and provisions to start your company on the right foot.
In conclusion, when deciding on the optional provisions to include in your Delaware LLC or corporation, it is important to consider the registered agent, company name, authorized shares of stock, par value of shares, indemnification provision, director-amended bylaws provision, and the benefits of forming your company with us. These provisions not only ensure compliance with state regulations but also offer important protections and flexibility for your company’s future success. By carefully selecting the appropriate provisions, you can establish a solid legal foundation for your business.