Myths

Common Incorporation Myths:
I can do this myself

There are numerous "how to" books and forms available in the market to create a corporation. Even the Georgia Secretary of State provides sample forms on its web site. However, there is much more to incorporating a business than filling out these sample "forms."

The following are common mistakes that the average "do-it-yourself" individual makes when attempting to form a corporation:

• Failing to take advantage of Statutory Close Corporation status for a small closely held corporation. See our Q&A for more details.
• Failing to include optional clauses to protect Directors from liability.
• Authorizing too many shares which can lead to otherwise unnecessary expenses.
• Authorizing too few shares (or issuing all authorized shares) which may later require an amendment of the Articles of Incorporation if more shareholders need to be added.
• Failing to properly "organize" your corporation (i.e., failing to draft organizational minutes, issue shares and sign stock subscription agreements, and adopt bylaws which govern the operation of the corporation).

Of all the above mistakes, the last is by far the most dangerous. Failure to properly organize could result in a judgment of personal liability in a lawsuit and/or a larger tax bill if the corporation is audited.

Our fee includes providing you with the solid legal advice that you need to properly form your entity, as well as the "organization" of the entity.