How Do You Set Up A Close Corporation?
A close corporation is a form of enterprise where the owner/shareholders are actively involved in the business affairs and management of the company. In order to insure that control remains with the select group of shareholders, certain documents need to be drafted at the inception stage of the corporation. Determine how many shareholders will be involved in the business. The corporation statutes of some jurisdictions limit the maximum number of allowable shareholders in a close corporation. Complete the Articles of Incorporation and file with the appropriate state agency (usually the Secretary of State’s Office). Designate officers and directors, list the number of shares the corporation is authorized to issue, and note any stock transfer restrictions. If it is known that certain shareholders will not participate in the management of the corporation, it may be prudent to authorize the corporation to issue two classes of stock: voting and non-voting. Stipulate in the by-laws how office
