What Is a Corporate Kit? Everything You Need to Know
A corporate kit is a top-quality binder that allows corporations and LLC's to protect and organize important company information and documents.3 min read
What is a corporate kit? A corporate kit is a top-quality binder that allows corporations and limited liability companies to protect and organize important company information and documents. This record book houses items such as licenses, meeting minutes, resolutions, formation paperwork, and the corporate seal.
What Is a Corporate Kit?
After a business is incorporated, it‘s important to hold a shareholder meeting to discuss how the new corporation may be organized. The primary objective of the meeting should be to appoint corporate officers and a board of directors. Other topics may include whether to issue paper stock certificates or adopt an official corporate seal. Legal requirements of paper stock certificates or a corporate seal differ from state to state. Therefore, it is important to research what the rules are for the state in which the company was incorporated.
At the time a corporation is formed, owners are often presented with the opportunity to purchase a corporate kit. This may be initiated either by an attorney or the company providing the assistance with preparing and filing your legal documents. A corporate kit is essentially a professional binder that contains all the paperwork and important company details needed for a new limited liability company (LLC) or corporation.
Typically, a kit contains blank stock certificates, a corporate seal, and a three-ring binder that serves as a minutes book. It‘s a convenient way to keep all business records in proper order. Corporate kits can conveniently be found at office supply stores and rubber stamp companies, generally costing about $50 to $150. It is not a requirement to purchase a corporate kit to incorporate in any state. In fact, a kit or any other associated items may be purchased any time after a company incorporates.
Although not a requirement, certain parties may request access to your corporate kit, including:
- Financial institutions, such as the company‘s bank
- Potential buyers
- Prospective investors
Corporate kits are state-specific. This means if you incorporate in Nevada, the corporate kit should only contain information that is relevant to Nevada companies.
What Is in a Corporate Kit?
The majority of businesses utilize their corporate kits as a secure place to organize important company documentation. This gold-embossed binder often contains several common components, including:
- Company guidebook: This guidebook is state-specific and contains a variety of information related to a new LLC or corporation.
- Corporate bylaws: The board of directors will develop a set of rules and responsibilities for directors, officers, and shareholders to effectively organize the internal management of the business. Bylaws may specify:
- Daily procedures
- Location and time of the yearly shareholder meeting
- Company structure
- The officers and company ownership
- LLC operating agreement: This template helps business owners lay out their LLC's ownership, membership, management, and daily company activities. LLC operating agreements are considered to be binding contracts among the members of an LLC. Unanimous consent is required if any changes are desired. In Delaware, neither the bylaws nor an LLC operating agreement needs to be disclosed to the Delaware Division of Corporations.
- Meeting minutes book: All corporations are required to have a minutes book. It is where all the notes from official company meetings are kept. Usually completed by the corporate secretary, any form of record keeping that accurately stores important documentation is acceptable. In fact, records may even be kept electronically.
- Corporate resolutions: This template accounts for all corporate resolutions in an LLC or corporation. Corporate resolutions should be kept on file because they document all the managerial decisions made on behalf of the company. An example of a corporate resolution is a bank resolution, which is often required prior to opening a corporate bank account.
- Membership/stock certificates: In a corporation, a stock certificate represents either a shareholder's ownership in a corporation or a member's ownership in an LLC. The majority of states don't require a corporation to issue a paper stock certificate. To clarify, a board can properly issue shares electronically or by ledger entries.
- Membership/stock transfer ledger: Any ownership or membership changes that may be made in the future are documented in a ledger.
- Corporate seal: This important tool is used to emboss all significant documents that have been agreed upon by a corporation's board of directors or an LLC's management team. State laws recognize the signatures of a corporation‘s authority figure(s) as holding the same power as a corporate seal. This may include those holding positions such as CEO or director.
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