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What is a Registered Agent?

Posted by American Ltd on Oct 13, 2015 8:30:00 AM

Thinking of Incorporating? You'll Need to Appoint a Registered Agent

What’s a registered agent? This is a commonly asked question among entrepreneurs who are new to the incorporation process.  It is a statutory requirement that all entities appoint a registered agent, also known as resident agent or statutory agent, when incorporating. The registered agent can be an individual or business entity and must have a physical address in the state of incorporation. The primary responsibility of the registered agent is to receive legal correspondence on the entity’s behalf, in addition to, any official notices from the Secretary of State. Failure to maintain a registered office in the state of incorporation can cause the entity to fall out of good standing and even be declared Void if a new agent is not appointed.

registered agent service what is itThere is often a misconception that the registered agent address is the same as the principal office address. This is not the case. The two are very different and serve different purposes. Most jurisdictions allow business entities to maintain a principal place of business outside the state. If the business does not operate or maintain an address in the state of incorporation, a commercial registered agent can be appointed. Many companies elect to appoint a "commercial" registered agent - like American Incorporators - to accept all legal and tax notices on behalf of a company and then forward it to the client. Designation of the registered agent is typically made on the formation documents. By electing a commercial registered agent the company does not have to worry about service providers arriving at their place of business, nor does their personal address have to be disclosed for public record or amended if it's a new address. 

Do I need a Registered Agent? Yes,virtually every state requires a registered agent be appointed to receive service of process and annual tax notices on behalf of the business entity. However, a registered agent is defined as a registered address in the state of formation. Thus, people who form their business in the state where they reside can serve as their own registered agent. Most people do, however, elect a commercial registered agent - 


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Topics: Registered Agent, forming a business, registered agent Delaware, create a corporation

3 Major Roles in Your Corporation

Posted by American Ltd on Oct 6, 2015 8:30:00 AM

Shareholders, Directors and Officers

Each of these positions play an important and distinct role within a corporation. The same individual can hold one or more of these positions. The roles of each are defined in a corporation's initial Articles of Incorporation and/or By-laws.

shareholders role in corporation

Shareholders are owners of the company based on their holdings. They purchase stock in the company and may receive dividends if the company is profitable. They may also vote on major company decisions such as mergers or liquidation. Shareholders are also known as stockholders





directors role in corporation

Directors, typically operating as part of a Board, make up the governing body elected by shareholders. They are responsible for the management of a corporation's business and affairs. 







officers role in corporation

Officers often consist of roles such as President, Vice President, Treasurer, and Secretary. Officers are appointed by the Board of Directors. They are responsible for carrying out the Board's policies and they are responsible for making day-to-day decisions. The number of board members and officers (and their responsibilities) will vary and is generally defined in the articles of incorporation or by-laws.





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How to meet State Requirements as Your Business Grows

Posted by American Ltd on Sep 29, 2015 8:30:00 AM

State to State Business Requirements

Business owners often differ in where they decide to incorporate. Some prefer to incorporate in their home state, while others prefer the benefits of corporate friendly states like Delaware or Nevada. However, it is important to consider state requirements, particularly requirements about qualification. 

qualifying your business in another state state regulations growing business requirements

These two major questions will prepare you to meet state qualification requirements for your business, especially as it grows:

1) Do I have to operate my business in the state where I incorporate?

The short answer is no. No state requires that you form your company in the state where you are doing business. And states like Delaware do not require that you conduct business in their state.  However, most states mandate that companies not formed there, but are conducting business in their boundaries, file a Certificate of Authority.This document in effect qualifies a business formed in another state to do business in the new state.  So if you form a Delaware LLC but are in fact conducting business in California you will have to qualify your business in California before you can do anything, including opening a bank account. This is much more expensive than simply filling your initial business in California. There are many factors that go into deciding where to form your business ans we recommend you speak with a lawyer or accountant if you are unsure. 

2) What does it mean to qualify in another state?

Qualifying to do business in another state is what happens when you are conducting business in a state other than where you initially formed your business. This may happen as your company grows and you decide to expand it in order to service neighboring states.  In other cases this happens because an individual decides for a number of reasons to form their company in a corporate friendly state like Delaware but plans to actually conduct business somewhere else. In this instance they can take advantage of Delaware laws and courts should they ever be sued, but qualify their business where they are actually located. 

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This Misconception Could Cost You

Posted by American Ltd on Sep 22, 2015 8:30:00 AM

Incorporating without a Lawyer

incorporating without a lawyer yes

Before you begin your journey as a business owner it is important to consult a trusted accountant and/or attorney for legal and financial advice that suits your personal needs. However, when you begin the actual incorporating process for the first time it is not required by law to file the paperwork with an attorney. Using a lawyer is most likely not a cost-effective option either. By using a formation company like American Incorporators you can save time and money.  
Incorporation specialists have an array of experience in forming corporations and LLCs. Specialists receive ongoing training from others in the industry. They can assist in all the necessary document filing in whichever state you choose to form in.  
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Need to Make a Company Change?

Posted by American Ltd on Sep 15, 2015 8:30:00 AM

Certificate of Amendment

Often times as companies grow, their original by-laws and operating agreements become outdated. Maybe the company needs to issue more shares of stock? Or maybe it is time for a name change? 

amendment filing name change AIL incorporate questions and answersWhatever the change, it must be filed as an amendment with the Secretary of State in the state of formation.

An amendment to your Corporation or Limited Liability Company is a formal filing with the state of registration that officially changes details of your business structure. Amendments can be very simple or very complex.n.  


Name change: If you decide your company name no longer describes your business instead of forming a whole new corporation or LLC, you can elect to simply "amend" the name

Stock change: When you need to raise additional capital to expend your corporation, you can issue stock. The amount of authorized stock can be increased by filing an amendment with the state. The price for stock amendments vary for each company. 

Change in Directors or Members: If one of the directors or members listed on the Articles of Incorporation or Organization leaves, or a new one is added, you can update that information by filing an amendment. 

Filing an amendment does not change your Federal Tax ID, since your company is still the same legal entity. However, the Internal Revenue Service (IRS) must be notified of any name amendments

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What is Par Value?

Posted by American Ltd on Sep 8, 2015 8:30:00 AM

stock par value questions and answers incorporate

Corporations such as C-Corps and S-Corps are owned by their shareholders. Shareholders are individuals who purchase stock in a company. A company does not have to be listed on a public stock exchange to sell stock in your company, the stocks can be sold privately to investors large or small. Stock can also be sold to employees as part of an Employee Stock Ownership Program (ESOP). The first step to selling stock is assigning it a par value. 

What is Par Value? 

When issuing stock for a corporation a par value must be assigned per share. Par value is the nominal value of a share of stock as specified by the corporate charter. The stock cannot be sold for less than the set value.This is not to be confused with the selling price or asking price, nor the market vakye the stock is exchanged at. Par value is the minimum price of a share below which the share cannot be issued.

For example, if par value of a stock is $10 and the stock is traded for $5 the company would be liable for the remaining $5. To avoid this companies typically offer no par value or a par value less than $0.01. Assigning higher par values and issuing more stock can also add to your annual tax payments and initial incorporation fees. 

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4 Thing You Need to Know about Stock

Posted by American Ltd on Sep 1, 2015 8:30:00 AM

What to Issue and How Much 

understanding stock value and shares formation questions

When incorporating your company it is important to understand the shares your company possesses, the right number of these shares to issue for your business venture, and the different ownership status with these shares. Many first time entrepreneurs lack clear, concise answers to their common questions about stock. AIL wants you to have the answers in order to run a successful business.



What is an issued share?

Issued shares represent the shares of stock that have actually been assigned or sold to shareholders. 

What is an authorized share?

Authorized shares are different than issued shares. They are the total number of shares that the company is allowed to issue. The number of authorized shares is specified initially in the company's Articles of Incorporation - however, the total can be amended with shareholder approval at a later date if necessary.Generally, a greater number of shares are authorized than required in order to give the company the flexibility to continue to issue stock as needed over time. 

How do I know how many authorized shares of stock to issue?

There is no magic number of shares that you should authorize when you form a company. The number depends largely on what you intend to do with the stock.  However, you should be aware that authorizing a higher number of shares than the state minimum (amount varies by state) can lead to higher formation costs and additional fees, even if those shares are not issued. AIL suggests a standard of 1500 shares in Delaware and 1000 shares in most other states.  We certainly can, and have, filed significantly higher amounts for our clients in the past. 

What is the difference between common and preferred stock?

Both common and preferred stock represent ownership in a C Corporation. Preferred stock shareholders are paid dividends first and more regularly than common stock holders.  Likewise, if the company liquidates or goes bankrupt, preferred shareholders are entitled to a portion of company assets before common shareholders.  However, they generally do not possess the same voting rights that are granted to common shareholders, whose number of votes correlates to their number of shares.  Preferred shareholders know the value of their projected dividends ahead of time and the amount they receive in dividend compensation does not increase with time. Alternatively, common shareholders may or may not receive dividends depending on how well the company is doing and the determination of the Board of Directors. 

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Need to Do Business in a New State? Here's How:

Posted by American Ltd on Aug 25, 2015 8:00:00 AM

Domestic and Foreign Qualifications


A domestic corporation or LLC is a company formed in the state it is operating in. Meaning if you form your corporation or LLC in Delaware - you will be considered a domestic entity in Delaware. A foreign corporation or LLC is a legal business entity that has qualified to do business in a state other than where it was initially incorporated. In order to become a foreign entity a business must first qualify.  

If a business would like to expand and do business in a state other than where they formed, a Foreign Qualification, or Certificate of Authority, can be filed with the state. Once this document is filed the business may be permitted as a foreign entity in the applicable states. Without the proper foreign qualification, you could lose access to that state's judicial system or even be hit with fines, back taxes and penalties. 

Corporations and LLCs are subject to taxes and annual report fees in both the state of formation and any states where they are qualified to do business as a foreign entity. Most states also require corporations and LLCs to have a registered agent in each state where the company is qualified.

Need a Foreign Qualification (Certificate of Authority)?

We prepare and file qualifications for a foreign corporation or LLC, plus we provide registered agent services in all 50 states. Visit us online: 


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Top 5 Reasons to Incorporate in Delaware

Posted by American Ltd on Aug 18, 2015 8:30:00 AM

State of Delaware Offers a Unique Climate for Business Formation

reasons to incorporate in Delaware questions about incorporating answers

More than a million business entities have been formed in Delaware, and over 50% of publicly traded companies make their legal home in Delaware (including nearly 65% of the current Fortune 500 companies). But why is Delaware so popular? Most business experts point to Delaware’s long-standing pro-business climate.



Why  Delaware?

  1. The state formation fees are reasonable ($89 for corporations and $90 for LLCs) and companies are formed within 24 hrs (in most cases) without paying additional expediting fees when you use American Incorporators Ltd to prepare and file your document.
  1. Delaware corporate law is well established (enacted in 1899) and reviewed annually so that the most current, advanced ideas in corporate law can be added.
  1. The Delaware Court of Chancery, a special business-only court of expert judges, hears and decides cases quickly and fairly, referencing a case law history over 100 years old. 
  1. The Delaware formation documents require only a general purpose (specific business activity description is not needed); one person can hold all offices (corporation) or can be the sole member (LLC) and does not need to be named on the document.
  1. Financial benefits - no state income tax and no business license required if not located in Delaware; no inheritance tax on stock held by non-residents. Many venture capitalists and angel investors prefer investing in Delaware-based corporations.

  Are you thinking of forming a business? 

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Topics: Delaware, c corp, Reasons to Incorporate in Delaware

How Do I Name My Business?

Posted by American Ltd on Aug 11, 2015 8:30:00 AM

Understanding the Basics

Naming my business incorporate llc question answer

Before you get started in your new business venture you will have to establish a name! Your business name is going to be one of the largest parts of your brand's identity and for many people the naming process is an exciting one that allows for creativity. It is important to pick a name that has both meaning to your customers and relevance to your product or service. Choosing a name that is both professional and creative can help your business stand out from competitors in the same field.  

Before beginning the process it is important that we address the answers to your most common naming questions:

1) Can I pick any name I want for my company? 

Generally yes, but naming conventions do exist and they vary state by state.  

  • You cannot name your company a name that is already in use in the state where you are forming.
  • There are limitations on corporate endings you can use. Many states limit the use of professional words such as "Accounting" or "Financial Services" to companies that have gone through a formal application process for the descriptor.
    • For LLC you can use: LLC or Limited Liability Company. For corporation you can use: Corp., Co., Inc., Ltd., or others depending on state law. 
  • Many states limit the use of 'less desirable' words in corporate names, as well. 

2) Can I change my company name after I incorporate?

Yes, you can file an amendment to your name at anytime.  The filing is done at the state level and is an easy process.  Just as with a new formation, the name you chose must be available for use in that state.  For assistance in filing an amendment please call: 800.421.2661

3) Do I have to reserve my company name ahead of time?

No, you do not. Although you certainly can reserve a name before formally incorporating, it is not required.  Many people reserve a name with their state of formation to assure that the trademark of that name is available before officially forming their company.  In some states, doing a name reservation ahead of time can save you time and money in the instance that your first choice name is not available. Other clients decide they really like a name and want to make sure it is available when they are ready to formally incorporate. Think of these scenarios in comparison to your own in order to help you decide!

4) How do I trademark my name?

AIL works closely with a third party vendor who specializes in trademark services.  The trademark process is entirely separate from the incorporation process and takes longer to complete.  

If time is of the essence we recommend you form your LLC or Corporation first and then begin the trademark process. In this instance, if your company name cannot be trademarked you can always file a name amendment and apply for a trademark for the new name! This will allow your corporation to maintain its original formation date.

If trademarking your name is a priority, we recommend you go through the trademark process first to secure the name you want. As mentioned in question 3, you can also file a name reservation with the state where you plan to incorporate while you wait for the trademark process to be completed. 


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