The legal mechanics of organizing corporations encompass a variety of corporate, tax, securities and business considerations. By anticipating the special problems and situations which are likely to arise in the course of the start-up company's growth, its founders can structure the organization of the corporation to minimize future obstacles. While most state laws governing incorporation provide wide flexibility in establishing the organization of the corporation, the structure of the corporation, once formed, takes on a life of its own and is not always easy to alter. It is therefore important that the founders, in the incorporation process, consider both their short-term and long-term objectives and organize the corporation in a manner which will facilitate, rather than frustrate, the accomplishment of these objectives.
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* Sections 2.10, 2.11, 2.12 and 2.13 infra have been prepared by Gregory C. Smith, Woodside Counsel, P.C., Redwood Shores, California.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
