Contributed By Allen Matkins Leck Gamble Mallory & Natsis LLP
Corporations require articles of incorporation to be filed in the state or jurisdiction where it is being formed. Incorporating in Delaware is popular because the jurisdiction allows for the waiver of fiduciary duties, which can then be defined and limited by contract. Delaware has a highly developed body of business law that generally defers to the defined contract terms.
The bylaws of a corporation set forth shareholder rights, provide for management through a board of directors, and set out officer provisions. The board is elected by the shareholders and is responsible for setting policy. Officers implement the policies of the board of directors.
For partnerships, a partnership certificate is generally filed in the state in which it seeks to be governed, and then the partners enter into a partnership agreement.
LLCs generally file a certificate of formation or articles of organization. LLC and partnership agreements are often very similar in substance.
Delaware entities that own California real estate generally qualify to do business in California by registering with the California Secretary of State and paying an annual $800 minimum franchise tax.