What’s an Incorporator? (And Do You EVEN Need One?!…)

 

What is an Incorporator?

What does an Incorporator do?

Can I, as the enterprise owner, be the incorporator?

Who can be an Incorporator?

To define Incorporator, it’s an individual who organizes the incorporation and arranges for the Articles of Incorporation to be filed with the Secretary of State and maybe a shareholder, a member of the board of directors, or an officer such as president, treasurer, or secretary.

When a business (a corporation or LLC) is formally registered with a state, certain information is required. Many states have in their registration process a requirement to disclose the name of the person who is in charge of formally setting up the organization.

For a corporation, this person is called the incorporator. For an LLC, this person is called the organizer. Most frequently, the incorporator is the lawyer handling the corporation’s formation. A business’s Incorporator is an important job, and you should understand the position thoroughly before choosing who will be in the service of this function.

If you’re looking to have an incorporator form your Corporation or LLC for you, email me at sam@mollaeilaw.com

 

What is an Incorporator?

An incorporator is someone who incorporates a business by filing forms with the state on its behalf and paying the required fees. A company may have one or more incorporators. Most states require a corporation to have at least three incorporators.

The company’s incorporators are not necessarily the same people who own it. The owners in most states hire an incorporator—for example, an attorney—to incorporate the business because all states require nonprofit corporations to have a statutory agent in the form of formation. The incorporator is simply the person that files the Articles of Organization (for LLC) or Articles of Incorporation (for Corporation) in the state department.

Incorporators must sign the articles of incorporation and are responsible for their content—the incorporator’s duties and title end after incorporating it. Unlike a director or shareholder, the position’s responsibilities do not continue for the length of the company’s existence and need to state the number of authorized shares for each class as well as the rights of each class of shares.

Another Name for Incorporator is Organizer.

An organizer is the same thing as an incorporator with only one crucial difference: what company they are filing and preparing articles of incorporation for. The qualified person who handles drafting, signing, and filing a company’s articles of incorporation is called an ‘organizer’ when the company in question is an LLC. When the company in question is a corporation, this person is then called an ‘incorporator.’

 

How do you define an Incorporator?

You might be wondering what his or her role is?

An incorporator is an individual who prepares and files the Articles of Incorporation with the Secretary of State to file the Corporation. The incorporator signs the Articles, verifying the information submitted is true and correct. Often, the incorporator is not a shareholder, director, or officer of the corporation.

The primary role of the incorporator is to prepare and sign the articles before listing the form with the state. According to Investopedia, the articles of incorporation form specifies the corporation’s name, filing articles, its core purpose, a list of all those who work on behalf of the corporation – together with their addresses – and the total number of common shares the corporation will issue.

Most frequently, the incorporator is the lawyer handling the corporation’s formation. Following the first meeting of the Board of Directors and officers, the incorporator resigns from its role and adopting bylaws. Accordingly, the incorporator’s signature appears on the corporation’s organizational documents.

In addition, the initial directors are either named in their articles of incorporation or elected at the organizational meeting. They serve until the shareholders hold their first meeting and elect their successors.

After that, they will serve until the next annual shareholders’ meeting.

Can Incorporators be a member of a law firm?

Incorporating a business is a requirement for the firm to have the structure of a corporation. Incorporators are typically the actual owners of the business. Still, they may also be employees or law firm members handling the incorporation process – also referred to as dummy incorporators, meaning they are legal placeholders. The qualifications for incorporators are set by the statutes of the state of domicile of the incorporators, and they may also be from the law firm in charge of incorporating the enterprise.

What Are the Responsibilities of an Incorporator?

The responsibilities of the incorporator include preparing and filing the articles of incorporation to establish a new corporation with a state. The incorporator attaches his contact details and signature to a resident agent; they don’t necessarily have to be. In contrast, their duties end the minute they have filed the relevant articles and don’t usually have a permanent position in the company once the listing is complete.

Can You be the Incorporator and Registered Agent?

Yes, you can serve as both.

Resident agents must be present at a company’s address to receive legal correspondence during standard business hours. These hours are generally considered from 9:00 a.m. to 5:00 p.m. from Monday through Friday. They are responsible for receiving legal and tax documents, must have a physical address (no P.O. boxes) in the state of incorporation, and be available during regular business hours. Remember that the statutory agent address is a matter of public record.

As the duties of an Incorporator end after the articles of incorporation are filed and do not conflict with the responsibilities of a statutory agent, one person is free to serve in both capacities without conflict. That being said, it is advisable to hire an agent for the service of the process so that you are not chained to your enterprise address at all times.

Moreover, your corporation’s principal place of business, the name and address of your corporation’s statutory agent, a statement of the corporation’s purpose, the corporation’s duration information about the number of shares.

Take note that you should know the company’s law where you receive official papers legal documents for your enterprise as a registered agent. And most importantly, the idea of more than one class or stakeholders and model enterprise corporations act as a whole.

What is business law?

The prime purpose of commercial law is to maintain the order of the company or corporation, resolve disputes, establish generally accepted standards, and protect rights and liberties when it comes to business and its relation to other companies, authorities, and clients.

It is essential that incorporators can be either individuals or entities. They can also have any role in the business or be hired for this quick process. Either way, they are in charge of the incorporation process.

This is a huge responsibility, as their signature is necessary to file the articles of incorporation only and adequately sign once they feel fully confident that the information contained therein is accurate. ‘

Model Business Corporation Act

In states that abide by the Model Business Corporation Act (MBCA), incorporators must review all of the statute’s provisions and determine whether the corporation’s articles are compliant. Only upon verifying compliance can incorporators sign and submit the document.

Ideally, Incorporators are personally liable for all fraudulent acts, decisions, and information before the enterprise is officially fully incorporated.

Can a Registered Agent and Organizer be the Same?

Like an Incorporator, an Organizer is perfectly free to act in the capacity of a Registered Agent.

Because an Organizer’s role within the company begins and ends with the preparation, signing, and filing of the Articles of Incorporation, there is no conflict to serve as a resident agent. When designating your company’s Registered Agent, keep in mind that this person must be available every day during business hours to receive legal correspondence.

You might not want to be the person who has to be there every day to receive this information and might consider hiring either an employee or a registered agent service to take the burden off of yourself.

Are Incorporators and Organizers the Same?

The Incorporator and Organizer have the same duties and responsibilities, with the only difference being which company they draft and file articles of incorporation for. When deciding who should be the person in charge of drafting, signing, and filing your company’s articles of incorporation, it’s essential to keep in mind the needs and complexity of your company’s structure.

For example, as an Organizer can file short articles of incorporation for an LLC, it is theoretically possible for a firm’s owner to do this themselves. However, as a corporation is a more complicated entity that serves more functions, a trained professional such as a business lawyer should be the company’s official Incorporator.

An LLC doesn’t have by-laws, but it does usually have an operating agreement, which is a document that spells out the rights and responsibilities of the members. The record to be signed depends on the requirements of the state.

Incorporator vs. Owner

The Incorporator’s duties begin with the articles of incorporation, and the owner takes a much more active and involved role in a company.

A company’s owner runs the whole show once the articles of incorporation have been filed. They are in charge of the business’s health long-term and handle everything from hiring staff to long-term financial goals and everything in between. Considering that most companies start with a small budget, it is common for the owners to serve as an Incorporator of a company or Organizer.

Incorporator vs. Shareholder

While an Incorporator may or may not be involved with the business after its formation, a shareholder is a partial owner of the company once it has formed. A shareholder is a partial owner of the business. This ownership is represented through the issuing of by issuing shares of stock, which add up to represent the percentage of the business company business legally company any particular shareholder owns.

Shareholders are given their rights as laid out in the corporation laws and include. They include the right to vote for corporation directors, the right to receive dividends if authorized, and the right to look at the corporation’s books. As with other positions, a Company Incorporator is free to act as a shareholder once the company has been formed.

Suppose you have questions about how to issue your business shares. Business, I can help you. Email me now at sam@mollaeilaw.com so we can get started.

Incorporator vs. Director

A Company Incorporator is responsible for the articles of incorporation, and a Director is a member of the board of directors. One of the most significant differences between these two offices is that an Incorporator’s job is done after the company is formed. A Director’s job only begins after a company is formed.

A Director of a company has many responsibilities. The director can make corporate changes, vote on and introduce bylaws, and make other business decisions that affect the corporation. Additionally, a director does not have to be an owner or shareholder to sit on the board of directors.

It is theoretically possible for an Incorporator of a company to sit on the board of directors after its formation. This person would have the rights and responsibilities of both offices.

Conclusion

An Incorporator is a person who files the documents to form the LLC or Corporation. As a business owner, you have enough on your plate without spending hours and hours of your own time researching how to write accurate articles of incorporation.

As a business lawyer, I’ve assisted hundreds of clients just like you start their business, and I can help you with yours. Email me at sam@mollaeilaw.com if you’d like me to be your incorporator to start your business.