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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10640
Experience:  30 years of corporate, litigation and international law
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So, what would you recommend I budget for setting up an S Corporation

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So, what would you recommend I budget for setting up an S Corporation for legal fees, registration fees, etc?
Customer: replied 5 years ago.
Anyone out there this morning?
Is this going to be a sole shareholder corporation? Do you want to do it yourself or have an attorney do all of it for you? What is the nature of the business you will be in?
Customer: replied 5 years ago.
I will be seeking investors shortly. So, I need a corporate structure that provides for such investment. I would like to have an attorney set it up, though I am willing to do it myself (depending on the cost of an attorney setting it up for me)

The business is a vendor of services and products to deliver clean energy systems to customers across the United States. I will likely have our primary office in California and back office workers in Texas or offshore.

The formation of the corporation using an attorney, which I do recommend involves the following:


(1) certificate of incorporation, including language to maximize indemnification rights, bylaws, organizational minutes

(2) shareholder agreement

(3) offering memo to bring in investors


The first item should be doable for $500-$600

The second item will depend on what the role of the investors is. If it is just passive minority investment, this may not be necessary. If they will have an active role and will have a substantial ownership interest, then you will need this and it can be fairly expensive depending on what is required. Some issues would be what happens on death or disability, if a person is coming in as an officer can he or she be kicked out at the whim of the majority or does the shareholder agreement require that shareholders and directors vote for the person to hold the office agreed to. This could be in the range of $1,500 to $2,500 depending on what is needed.


The last item is probably the most expensive depending on (1) the nature of the investors - are they accredited investors, (2) how many are there - more or less than 35 in number, and (3) how much you are seeking to raise. If this is going to be a small group of accredited investors raising a modest amount of money, then you can probably do it with a relatively short offering memorandum and a copy of your business plan. This could be less than $2,000. If you are raising substantial sums, then you are looking at a proper offering memorandum and that could run $10,000 to $20,000.


A lot depends on the amount you are raising, the number of investors and how sophisticated they are. The offering memo is basically your protection from being sued in the future if things go badly. It lays out all the risks, the competitive environment, the background of the principals and verification that the person can sustain a total loss of their investment.


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This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

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