Organizing the corporation
After the certificate is filed, the corporation still needs to be organized: bylaws adopted, directors and officers appointed, and shares issued to the founders in exchange for cash, property, or services. These steps are usually documented in written consents and recorded in a stock ledger. Founders frequently skip them or handle them informally, and the gap tends to surface during a financing or acquisition, when investors or buyers ask for a clean record of who owns what. Repairing missing records later is possible but slower and sometimes costly.
Founder stock, vesting, and IP
Founder shares are often subject to vesting, so that a co-founder who leaves early does not keep a full stake. When shares subject to vesting are issued, there is a federal tax election founders often want to make, and it has a short filing window that cannot be extended, so speak with a tax adviser before the shares are issued. Every founder, and every early contractor who builds the product, should assign relevant inventions and work to the company in writing. Investors routinely check for these assignments, and missing ones can delay or reshape a deal.
Decisions to make together
In a first meeting we discuss how equity is split and why, whether an option pool should be reserved for future hires, and who will sit on the board. We also look at whether the corporation needs to register in other states where it will operate. If the founders already signed documents through an online service, bring them, since we often find inconsistencies between the filed certificate and what the founders believe they agreed. Getting corporate formation right at the start is much cheaper than reconstructing it when an investor's diligence list arrives. If anyone was promised equity before formation, raise it now, because informal promises are easier to document at the start than to unwind later.
