Countersign Church Membership Certificate Made Easy

Membership units certificate form

hi this is Lee Phillips I'm an attorney and this is another piece in my series on YouTube about corporate formalities what you do when you create and operate a corporation or a limited liability company and the two animals are quite similar in their care and feeding we'll assume that you've set up your company you file all the stuff with the state you've signed you everything they need you've paid your money now what happens well one of the first things that you need to do is decide who's the owner or owners of your company that maybe you maybe you and your husband wife maybe you and your partner's and I'm not calling a partner in a partnership sense I'm just saying people you work with in the company but who owns it well you need to define who owns it sometimes that's required in the Articles of Incorporation or the articles of organization which are the papers you file with the state to create the company but it's almost always required or should be a good idea anyway to include that sort of stuff in the bylaws the rules of the game if you're a corporation or the operating agreement the rules of the game if you are an LLC they're the same thing but we call them by different names so that we know that's corporation that's LLC that should talk about who the owners are and what percentage ownership they have and in a corporation a lot of the times the corporate corporation will keep all this what we call Treasury stock no stock certificate in issue is just mine it's the company's and in the LLC they can keep back ownership by the LLC of a percentage or a number of shares of the ownership of the LLC so you don't need to issue all of the shares at once and by the way one things that may be asked on the Articles of Incorporation is how many shares you've been issue if you issue 10 trillion shares the states going to charge you you get the first 20,000 shares for free meet state filing fees and after that they start tacking on and I don't know what the number is it might not be 20,000 but they start tacking on additional fees so you don't want to issue six trillion shares of stock if I own the company one share of stock is all I need one of the things that I'm going to do when I get you into court and Sue you and so I'm going to say okay who are the owners of the company how do you know that there are owners of the company if you say well I'm the owner of the company okay did you issue a stock certificate or a membership certificate is what we call it in an LLC how do we know that you're the owner of the company well it says it in the bylaws it says it in the articles of further the operating agreement that's fine but I also want to see in actual stocks or to you if I'm going to invest in your company and I'm going to be a third party guy silent out there I'm going to give you the money what do I want back well I want a stock certificate back or a membership interest you to get back which shows that piece paper shows that I own X percent of this company somebody shares in this company if you haven't actually issued the stock certificate or the membership interest certificate then when I get you into court I've got an argument your honor this wasn't a real company they didn't even bother to define the ownership of the company the guy knew he owned it all it was his no problem it's his all regal I want you to let me pierce the corporate veil then go after the guy directly so one of the elements that I'm going to be looking for in the lawsuit is where is the ledger you have a stock ledger membership interest ledger where you write down certificate number one issued on such-and-such a date to so on so for so many shares and I want to see that ledger and then I want to see the stock certificate which goes through a certificate number one and unless you haven't jumped these hurdles actually done the paperwork that's one indicia of the fact that a you didn't treat this like a real company why do I have to treat it like a real company and the courts will if they stack up enough of these against you they will do what's called pierce the corporate veil and they will come after you personally so these little steps none of them are fatal particularly a couple of them are pretty close but they all add up it's the weight of the evidence how did you treat your company if you give IBM 100 bucks you want a hundred bucks and stock back don't you same thing think about how do I want my company to act how do I want to be treated and if it's third party arm's length we've got a good chance of keeping the limited liability and these corporate formalities of which issuing the stock the ledger all that stuff is one of them it's these corporate formalities that add up that either give the court the tip in your direction to protect you with the limited liability or give the tip to the court in the other direction to pierce the corporate veil so these are really important issue your stock your membership interests