Can I eSign Delaware Articles of Incorporation Template

Can i document type e sign articles of incorporation template delaware

the short answer to why'd tech startups are always born dis Delaware C Corp the long answer really breaks it down into two questions the first one is why is it a Delaware corporation and the second one is why is that corporation taxed as a C Corp so with regard to it being a Delaware corporation the reason for this really is historical so every state writes their own laws regarding corporate law and Delaware was one of the small states that decided that they wanted to try to boost their economy by inviting corporations to be formed in their state so their legislature was very proactive about making laws that were protective of the management of corporations the people who decide where the corporation might be based and also you know statutory provisions for the sort of transactions that corporations might go through so this resulted in a lot of companies deciding that they wanted to be incorporated in Delaware the result of that then was that a lot of the sort of disputes that might arise between participants of a corporation so the management and the stockholders these things played out in Delaware a lot because a lot of the activity was there so Delaware even has its own court system the Court of Chancery which is for hearing these particular types of disputes and because there's such a robust canon of law that exists in Delaware both do the statutes and then also through all the court determinations there's a lot of predictability on how certain transactions will go and what the responsibilities are of management to make sure that they're insulated from risk to stockholders and this is the kind of thing that makes investors feel comfortable investors are going to be participating in the company on a couple of levels one is that there'll be a stockholder they're you know making an investment to purchase some stock in the company and the other is that a lot of VC partners are going to sit on the board of directors of the corporations that they invest in so they're going to be the people that are making these decisions on certain transactions like investments mergers acquisitions it's all been the company and so forth that could potentially create some liability to the stockholders of the corporation with regard to the question about why Asik or the two types of Taxation for a corporation RS Corp and C Corp a corporation that this taxed as a C Corp becomes its own taxpayer you know it has a certain amount of profit every year and that profit becomes income that it pays income taxes on as though it were you know an individual person filing their tax return each year for the amount of income that they recognize an S corp on the other hand is what we call pass-through and a D meaning that the corporation itself doesn't pay any income taxes and instead the stockholders of the corporation pay some proportional share of the income or potentially recognize a proportional share of the losses of the corporation on a year-to-year basis so the corporation itself doesn't file any annual tax return the individual stockholders are the ones that recognize the taxation of the company annually so a venture-backed company is usually not even going to be eligible for S corp tax treatment for one it requires that there only be a single class of stock and conventionally venture capital investment deals are done through the sale of preferred stock which is a new class that gets introduced on top of the common stock that all of the founders and employees have so that alone would be enough to knock it out of out of eligibility in addition to that an S corp is not allowed to have any corporate stockholders it's not allowed to have any non-resident tax payers as owners of the stock either even if that weren't the case venture capital funds are structured in a way where they're usually a pass-through entity themselves so they're a limited partnership and if the corporation that they invest in is a pass-through entity and they are pass-through entity then the profits and losses would pass through both levels and go to the investors of the venture capital fund that would be a problem because a lot of those investors are going to be 501 C 3 nonprofits like school endowments pensions and other sources of institutional funds that are structured as 501 C 3s and the problem there is that if that income passes through both of those levels to the 501 C 3 then the 501 C 3 needs to pay what we call unrelated business income tax on that income nonprofits don't want to do this they tip just make investments and then reap the benefits of the investment on a tax-free basis they don't want to be engaged in the commercial conduct or paying taxes as though they're engaged in the commercial conduct on the extreme end of things has actually even possible for a 501 C 3 to lose their 501c3 status if too much of their activity is commercial and so that could potentially be a concern as well at a really basic level a lot of investors don't want to be involved in the annual taxation of the corporation they don't want to recognize some portion of the income or recognize you know portion of the losses even though that you know potentially as a tax benefit instead they just want to buy and sell the stock buy it hopefully sell it at and appreciated amount and then pay capital gains tax once that time comes but aren't looking to get involved on a more regular basis than that on top of all of this there are a few tax benefits that are really beneficial for investors of a C Corp one of them relies on the company having qualified small business stock and among other criteria this means that it is stock and a domestic C Corp with qualified small business stock an investor can sell their stock that can dispose of their stock and have up to ten million dollars of that appreciation be tax-free and not recognized as capital gains there's also a tax provision that allows for investors to take a ordinary loss on a certain amount of losses from the disposition of stock and there's another provision that allows for the deferral of recognition of capital gains and some of the taxes so there really are a lot of reasons why these types of investors would prefer to have C Corp stock rather than S Corp stock it's certainly the case in some industries and with some investors that they prefer the opposite but the convention in this base the structuring and the tax optimization are all surrounding investments in C Corp stock