Why Your Startup Needs Bylaws

Why Your Startup Needs Bylaws

Business Formation, Corporations, Entity Formation
To help your startup succeed with as few internal complications as possible, founders should make having a set of robust corporate Bylaws a priority from the beginning. In this post, we take a look at what Bylaws are, what they do, and why your startup needs to have them in place (hint: it's the law in Arizona). What are Bylaws? While it's tempting to believe that corporate Bylaws are only for large, faceless, mega-corporations, as opposed to your lean, development-stage startup, nothing could be further from the truth. Any company (of whatever size) that chooses the corporate form through which to conduct its business should really have a well-crafted set of Bylaws in place. In a nutshell, a corporation's Bylaws are the internal guidelines that deal with how your corporation…
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What Up, B? Is a Benefit Corporation Right for Your Startup?

What Up, B? Is a Benefit Corporation Right for Your Startup?

B Corporation, Corporations
It's hard to believe that five years have past since Arizona allowed new businesses to form as "B" corporations here in our State.  While the bulk of my work with startup companies still involves more traditional corporations and LLCs, lately I've witnessed an uptick in interest from startup founders asking about organizing as a B corp.  I believe this trend will continue as the appetite for ethical corporate governance and good corporate citizenship continues to grow.  So what is a B corporation anyway? The B Corporation: What It Is and Is Not For those that don't know, the "B" in B corporation stands for "benefit" (or, more specifically under Arizona Revised Statutes §10-2402, a "general public benefit").   Think of these entities as (with apologies to the late President Bush)…
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What Is My Liability as Startup Co-Founder?

What Is My Liability as Startup Co-Founder?

Contracts, Corporations, Start-Up
The forming and launching of a new startup company is an exciting, possibly life altering event.  But if you and your fellow co-founders ignore or fail to take certain precautions, being a co-founder has potential to be life altering in a negative way.   So just what is your liability as a co-founder of a startup? Ways Your Startup Could Be Liable When I talk to startup clients about their liability concerns, I find it helps to break the universe of potential liability into two main camps: tort and contractual.   Note: I will save a potentially large---but no less serious---third (or fourth, if you count regulatory) category of corporate tax, payroll tax, and pension liabilities for another day/blog post. In its most basic terms, tort liability is where you,…
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Do I Need to Register My Out-of-State Corporation in Arizona?

Do I Need to Register My Out-of-State Corporation in Arizona?

Business Formation, Corporations, Entity Formation, Foreign Corporation
If you're an Arizona startup that is actually incorporated in another state (e.g., Delaware), chances are by now you've heard that you may have to register to do business here in the State, even though you are already incorporated in a different state. In this post, we examine whether and when you must register your out-of-state corporation in Arizona. Operating in Arizona but incorporated elsewhere? This question is far more common than it might seem in our Phoenix startup law practice. For example, earlier this month I met with representatives of a middleware outfit that had originally formed as a corporation in a state back East. However, their U.S., Canada, and Mexico operations had just recently relocated to the metro Phoenix area. During our meeting, I asked if they had…
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How to Get an Arizona Business License

How to Get an Arizona Business License

Business Formation, Corporations, Licensing
There are occasions when I'll get a call from a new (or aspiring) business owner who calls or e-mails me saying, "I need to get an Arizona business license". This statement is normally followed up by some variation of, "Can your firm help us with this?" These questions are based largely on a number of (understandable, yet incorrect) assumptions: First, that their business even requires a license to begin with; second, that such a license is given out by some central licensing authority here in Arizona, and, lastly, that there is a one-size-fits-all business license for every type of business out there. While one or more of these assumptions might be true in other 49 States, this is not the case here in Arizona. Generally speaking, Arizona handles business licensing…
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