In our previous installment of The Journey, we learned about different business types. We also learned that the world loves it when Brian gets laryngitis. Let’s see what else we can learn when it finally comes time to form the business….
With most endeavors in life, there are two ways you can do things – either the cheap and difficult way or the expensive and easy way. Walking to work is very very cheap, but probably not the easiest thing to do. Driving to work will save your sanity, but cost your wallet dearly. Starting a corporation is no different. Since both Chris and I are college graduates and my alter ego is an accountant (my superhero identity, of course, being “Sasquatch: Devourer of Mass Quantities of Food!”), we thought we could take the cheaper way to start a corporation. We’re no strangers to research and/or a little hard work, and I don’t seem to have the same phobia as most of society toward paper work (another super power, perhaps?), so we decided to roll up our sleeves, show some American spirit, and do it ourselves! Well, it was a good idea at least.
The biggest problem we faced was where to begin. We were ready to fill out any and every form we could find. But which ones? And in what order? Of course, federal forms and state forms are different animals. That are untamable. With sharp, pointy teeth. We went to our state’s website, but that only helped to a certain extent. It listed all kinds of forms, but it told us neither the specific forms we needed nor the proper order in which to file them with the state. And the federal government? Fahgedaboudit!
We did manage to figure out how to file for a fictitious name, though. Filled out the form, wrote out the check and off it went. The interesting thing about that was our lawyer later told us that the procedure wasn’t in place to protect us, but it instead protected the public FROM us, letting the good citizens know that we would be operating business under the name Fortress Publishing, Inc. A piece of paper and a small ad in the local newspaper were supposed to protect the public from Chris and me? The comedy just writes itself: Two bald men went on a rampage in south, central Pennsylvania, drinking all the beer and eating all the hot wings the region had, but before all hope was lost, they were thwarted by… an official government document!
As you can probably surmise by now, Chris and I caved in and took the easy, but expensive, way out. We hired a lawyer to create, and file with the state and federal governments, the Articles of Incorporation, the agenda for the initial Board of Directors meeting, and corporate by-laws. We then had an accountant friend of ours help us get our tax ID number, sales tax numbers, and “S” Corporation status elections, for both state and fed. It was certainly a lot of paperwork considering we live in a paperless society. However, we did find solace in knowing that we had experts involved. Certainly, we would have overlooked a form or two or filed them in improper order, undoubtedly creating a scenario very similar to Terry Gilliam’s “Brazil.”
In the meantime, our third partner decided not to participate in the corporation. Of course, his money wasn’t going to participate in the corporation either. The true beauty of the situation was he decided to tell us AFTER we put his name on the Articles of Incorporation, elected him to the Board of Directors, and made him an Officer. So, for our first official Board of Directors meeting, we had to un-elect him from all of the above. Remember, as a corporation there are certain rules you need to follow, including the occasional Board of Directors meeting with legible minutes, election of officers, issuing stock, yadda yadda yadda. However, we hold all our business meetings at the local Hooters, so they aren’t quite as boring as they may sound. Before you ask – yes, the local Hooters is very conducive to conducting official business. We may now be CEOs and Presidents and all kinds of official sounding titles, but we’re still writers at heart and we find the environment very emotionally stirring.
One of the more exciting (and I use that term very loosely) things about becoming a corporation is the “corporate kit.” Chris and I are men, so when we heard the word “kit” we immediately translated it to “cool toy.” Tools come in kits. When you buy a grill, it comes in a kit-like box – and there are very few toys cooler than a grill. So, we were pretty amped up when it came. It was basically a large notebook with a sheath. There was a section for minutes, record keeping and the corporation’s stock certificates were located in the kit as well. SWEET! There were only twenty certificates, so we decided to use only two (one for Chris, one for me) and not all twenty. There was one item that caused the clouds to part and a ray of light to shine from Heaven upon it – the corporate seal. It looks like any standard paper crimper that any Notary Public would have. But it was OUR corporate seal! We paid for this! There was a certain sense of pride we had discovered in following through with the creation of a corporation. We showed that pride by putting our mark on any piece of paper we could fit between the plates. Every scrap paper in my office, every one of my son’s pieces of artwork on the fridge, every receipt I could find. I was so maniacal with it the dogs ran and hid in any room I wasn’t.
Even though it was quite a struggle (that we eventually solved with our checkbook), starting our own corporation was kind of a rush. We get to honestly say we own our own publishing company. And no matter how hardcore “down with the institution” you are, you can’t help but have an extra swagger in your step knowing you are legitimately a President or VP of a corporation. So, now what…?
Next Issue: “Foundation.”
Post Script: This article was originally written well over a decade ago about events that occurred even farther back in time. The commonwealth of Pennsylvania has made significant strides in making information about starting a small business readily available, especially with their recent website, business.pa.gov.