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I am trying to determine the authoriities a "Sole Incorporator"

Resolved Question:

I am trying to determine the authoriities a "Sole Incorporator" might have at a company. Are there any? Are there any liabilities? I realize that a sole director and of course, sole shareholder has authorities, but not a sole director.

Any ideas? thanks
Submitted: 1 year ago.
Category: Business Law
Expert:  TexLaw replied 1 year ago.
Hi,

Thanks for your question.

When you say "authorities" what are you thinking of specifically?
Customer: replied 1 year ago.

What power does a sole incorporator have over the company he/she is incorporating?

Expert:  TexLaw replied 1 year ago.
I see, thank you.

When you are the sole shareholder of a company that you are incorporating, you have absolute power over the corporation. In other words, there is no limitation on what the you can direct the corporation to do in regard to the conduct of its business.

The main issue at this point is to maintain the corporate form and not treat it as your personal piggy bank or alter ego. In other words, you must
1. always keep strict records,
2. keep separation between your personal accounts and the corporation's accounts,
3. do not use corporate money for your personal expenses.
4. When you conduct business in the corporate name, you must maintain that formality (never sign a contract in your personal name...always sign as "CEO of X Corp".

As long as you maintain the corporate formalities, your corporation will be ruled to be a separate entity and your personal assets will be protected from business liabilities.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
ZDN
Customer: replied 1 year ago.

Could you be Sole Incorporator for a company in which you were not the sole shareholder?

Expert:  TexLaw replied 1 year ago.
Ah. I see.

An "incorporator" is not necessarily the person who owns the corporation, nor is it the person who has any control over the corporation.

For example, a lawyer can act as an incorporator. In that circumstance, all that is happening is the incorporator is acting to form the corporation, which is owned by the shareholders and operated by the directors.

Where there is no one else but the incorporator, then the company will be said to be wholly owned by the incorporator and wholly controlled by the incorporator, until the incorporator issues shares and sells them to shareholders.
TexLaw, Attorney
Category: Business Law
Satisfied Customers: 4213
Experience: Internationational Commercial Attorney
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