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If you have made the decision to switch your company to a corporation, you will need to file Articles of Incorporation with the state agency where you are planning to headquarter your corporation, or in lieu of a state agency, whatever regulatory agency in your area that looks after corporations. Your articles of incorporation are essentially an official announcement to the rest of the world that your company is now a corporation and has limited liability. While the requirement governing the articles of incorporation varies from state to state and from jurisdiction to jurisdiction, most of them require the same information to be disclosed.

First off, you have to name your corporation. In most cases, you will have to pick a corporate name that is completely unique in the United States, but some jurisdictions allow you to use similar names, as long as it is unique in that particular area. You will also have to include some kind of sign that your company is in fact a corporation by including the word corporation or incorporated in your official name so there is never any confusion. There is also a degree of regulation on the name you pick so that it doesn’t insinuate that your company does something it doesn’t or is affiliated with someone it isn’t.

The next part of the articles of incorporation usually talks about the people involved in the company in question. You will be asked to identify the owner, the president, the CEO, CFO and the members of the board of directors. In most cases, you don’t need anything very specific here, simply names and titles.

You will also need to specify if your company plans on going public and offering stock or if you will be a privately held company without stock.

There will also be a section where you will be asked if your corporation is only in existence for a period of time or for perpetuity. The way the laws governing corporations work in the United States is that your corporation exists as long as you continue to renew the necessary paperwork each year.

In some areas, a corporation is required to issue a statement of purpose, or a short paragraph explaining why it is being formed. Often times, a general, template paragraph is issued here unless you are forming a non-profit with a specific goal other than making money.

If you are forming a non profit, you will have to state that you are and exact wording must be used for you to qualify as tax exempt in the eyes of the Internal Revenue Service.

If you have decided to file as a stock corporation, you will need to issue details on your stock, how much of it you are making available to the general public and for how much.

Finally, you will have to include the address and information on your corporate headquarters and who the official director is. The articles of corporation are an essential part business life in the 21st century.

A corporate bylaw is basically a rule that helps to govern a corporation. Just like municipal bylaws that help govern a city, a corporate bylaw can not contradict local, state or federal laws in any way or they are invalid. Every corporation has their own set of bylaws in which to operate by.

In most cases, a corporations’ original set of bylaws are spelled out in the Articles of Incorporation, a document filed with the state or local corporate regulatory agency that announces a company is becoming a corporation and why. This is much like a first draft of an ever changing essay, as the corporate bylaws can be updated on a regular basis.

Depending on the jurisdiction, the corporate bylaws can be changed during any meeting of the board of directors, or they sometimes require a vote by the shareholders. This is often done at shareholders meetings and recorded in the official minutes for that meeting. Depending on the rules under which the corporation has been founded, you may need a certain percentage of shareholder votes plus a percentage of the board of directors to change a corporate bylaw. These rules are usually set forth when the company issues its articles of incorporation.

It wasn’t that long ago that most corporations issued a constitution and a list of corporate bylaws, but that is considered a somewhat antiquated way of doing things now and most corporations simply stick to a list of bylaws to reduce confusion. The list of bylaws essentially outlines the basic tenants and beliefs that the corporation will be run under. It can be a combination of business rules and ethics, as well as a general list of proper ways to deal with fellow employees and a pledge to honesty and integrity at all times. A violation of bylaws is often sighted as reason for termination of select employees from mail room clerks to presidents and CEOs. Bylaws are also often sighted if a company is accused of any kind of impropriety or if they should happen to declare bankruptcy and a regulatory agency can point to incidents where members of the board of directors knowingly and willfully violated their own corporate bylaws for personal gain.

When two companies merge, one important task that the two companies must engage in is to either combine the two sets of bylaws that the companies function under or choose one set of bylaws over the other. It would be next to impossible for two companies to compete under the same corporate umbrella with two different sets of bylaws that could theoretically compete with each other.

Whenever there is a change made to a corporate bylaw, an official record must be kept and most jurisdictions require that change to be filed with either the state or the regulatory agency that watches corporations in that area. Employees at every level will be notified and in some cases, they might even get a vote. Corporate bylaws are a very important part of today’s rapidly changing business culture.

While keeping accurate and formal minutes may not seem like that big of a deal, if your corporation should ever run into trouble, your minutes can constitute important evidence of what went on during shareholder meetings and meetings of the board of directors that can often clear important people of wrongdoing. Minutes are considered to be an official record of what went on and are as vitally important to proper record keeping as having accurate books. Let’s take a look at some of the finer points of keeping proper corporate minutes.

Although rules and regulations vary from place to place, some jurisdictions consider minutes to be a required part of being a corporation. Some jurisdictions actually require that minutes be filed every month or at least once per year with the proper regulatory agency in the name of transparency and corporate good will. Of course, altering or doctoring minutes is incredibly simple and is often done to protect trade secrets, but this can lead to widespread accusations of impropriety should those minutes ever be needed to be read in court or by anyone outside of the corporation.

The penalty in these jurisdictions for altering, doctoring or simply not filing minutes can be quite strict. With the recent spate of corporate scandals like Enron, Adelphia and Worldcom, regulatory agencies from coast to coast are expressing a new interest in corporations filing accurate and unadulterated minutes.

Most people are familiar with the idea of keeping minutes during a meeting of the board of directors for a major corporation, but it is also required in many areas to keep minutes for shareholders meetings, as well, especially during the one annual meeting that all corporations have with shareholders, although some corporations have more than one. The minutes from one of these shareholder meetings usually reflect changes to the corporation such as electing new officers to the corporation, adopting or changing any policies that affect the whole corporation, creating committees within the corporation and assigning them responsibilities, the selling and issuing of stock to the public or for use inside of the corporation itself, the sale of company assets or the change of company assets in any way, shape or form, looking at, approving or turning down mergers of any kind, changing employee benefits or pension plans, approving or denying any types of loans for the corporation and starting or ending joint ventures. These are just a handful of the issues that corporate minutes can cover if they are brought up at a shareholders meeting, so you can see why regulatory agencies would be interested in reading them if something goes wrong.

Writing minutes also has its own particular format, much like writing shorthand. First, the minutes should show where the meeting took place and how long it was, who was there, who spoke and about what. Each company can have their own minutes format as long as all of the necessary information is included. Often the minutes will be typed up and distributed to everyone who needs a copy, including the government.

The world of corporate America is quite familiar with the employee agreement, also known as an employee contract. They are used from every level of employment, from the mail room to the board of directors. They are often governed by the corporate constitution or corporate bylaws, or sometimes both. Many people don’t realize that they are even signing an employee agreement when they are hired but they are often embedded in the average employment application or they are signed on the first day of work when most people fill out tax forms and other paperwork. Let’s take a look at what goes into the average employee agreement.

In most cases, an employment agreement is a brief contract that simply outlines the basics of a job, what you’ll make and what you have to do to get fired. It is only when the job begins to add zeros at the end of the salary that the average employment agreement begins to multiply in pages. When you think about a professional athlete’s employment contract that he or she has with a pro sports team, images of dictionary sized contracts that stretch for hundreds of pages come to mind with clauses to cover every conceivable instance that could come up. Employment agreements like these only exist for the highest of high rollers, but they are a necessary part of corporate life in the 21st century.

One part of an employment contract that many people overlook is the part spelling out benefits, not just wages. For some companies, this part of the contract is simply copied and pasted from a template to reflect what all employees at that level receive as benefits, but if you are a CEO or if the position you have is completely unique, that part of the contract will have to be crafted by hand and made especially for that person.

There can also be a part of your employment agreement that takes about reimbursement of expenses. Again, this isn’t a part of a contract that a mail room employee would have to worry about, but if your job is going to be taking you to the far reaches of the globe, you will want to have the procedure for things like this written directly into your contract.

Sometimes, employees can have special clauses written directly into their employment contract that are needed because their job is utterly and completely unique. Of course, crafting individual contracts can be a great expense to any corporation, even if you have your own team of on-staff lawyers, so, in most cases, templates are used whenever possible.

Employment contracts can also have special clauses or conditions inserted in them by the employer. Things like performance guidelines or personal conduct requirements can be written in and are usually quite legal although they can obviously be challenged by an employee if he or she feels that they are unfair.

The world of employment agreements is an interesting one that is constantly changing and evolving.

Just like the name suggests, a service contract is an agreement between one company and another or between one company and a freelance individual to perform a particular task or job over a set period of time for a set amount of money. A service contract can be just as simple as that, or, if the contract is for an extended period of time or for a large amount of money, the contract can balloon up in size so that every conceivable base is covered along the way. Let’s take a look at how service contracts work.

The driving force behind the lengthy service contract is simply protection. The company issuing the service contract simply wants to ensure that their interests are protected, no matter what, and it is those words that can turn a simple 2 to 3 page contract into an encyclopedia. A basic service contract starts with the names of the parties involved, and the dates in which the service contract is valid. The next section of the contract explains what the job in question is, how it is to be done and under what terms. Often times the time frame in which the job can be completed is repeated here for emphasis. The next part of the contract will go over the financial terms of the deal, including the budget for the project and the pay allotted to the company or individual performing the services in question. The final part of the contract is simply where both parties sign. It can be as simple as that, but in most cases, it isn’t.

On more complicated service contracts, there will often be expanded sections that go into great detail about the work that is being done so that there aren’t any second guesses once work gets under way. This section can be as long or as short as both parties agree for it to be. Many contractors prefer to have this part of the contract be quite long as to eliminate any kind of confusion later on.

Some service contracts name investors that are part of the financial terms. This only really happens when the financial terms are huge and one payee can’t cover the total cost. One newly added part of most service contracts is a separate or embedded section on confidentiality and non disclosure. With this part of the contract, the companies agree not to share or disclose what could be any kind of trade secrets or even national security issues. It is almost impossible to find a service contract these days that doesn’t have at least one section on privacy or confidentiality.

Finally, some service contracts contain a section on non-competition. A non competition clause requires that a company or individual can’t work for a competing company for a set amount of time. The idea is that the company being used in the service agreement now has too much vital information that can be passed on to the competition. Service agreements are a common part of today’s business world.

While many of us have heard of, and even signed, confidentiality or non disclosure agreements in the past, many of us don’t understand the full impact of these contracts. Some companies choose to use stand alone confidentiality agreements while others have them smartly inserted into other types of agreements. Let’s take a look at this very common and important type of contract.

There are two main types of confidentiality agreements: ones between two companies or a company and an individual that have come to an agreement and want to protect their interests and ones between companies and employees. The point of the confidentiality agreement is the same, no matter which kind you find yourself signing: a company has a trade secret or a private piece of information that they want to keep private. When you sign a confidentially agreement, you are agreeing to remain silent on a particular issue. The penalty for violating a confidentiality agreement can be quite stiff and can result in heavy fines and even jail time so you should never take a confidentially agreement that you’ve signed casually.

Perhaps the best known type of confidentiality agreement that is signed is between a company and another company or between a company and an individual to help protect a trade secret or even a national security issue. It could be that in the course of a partnership between a company and a second party, a trade secret, or part of a trade secret was revealed and everyone who came into contact with that information was required to sign a form saying that they can’t reveal what they learned by penalty of law.

A similar agreement is often signed by new employees at various companies. These types of agreements have even filtered down to low wage employees who are able to access specially designed computer systems that may benefit that companies’ competition if it were ever leaked. In this case, a confidentiality agreement is often slipped into the job application that you will fill out and sign to get hired. Sometimes, the agreement is signed separately on your first day of work with several other forms. Many companies try to keep these types of agreements to a minimum since it is difficult to stop the flow of information when it is being disseminated to so many people.

There are other types of confidentiality agreements, too. Often times, if you take part in a court case, you are not legally allowed to talk about what went on in court for any reason. In some court cases, you will actually be asked to sign a confidentiality agreement, while in other cases, an oral contract is made with the judge presiding over the case.

You probably don’t even realize it, but you have likely signed several confidentiality agreements over the years, and although most of them are never pursued legally, it is always a good idea to keep in mind what you’ve signed off on because the penalty for violating a confidentiality agreement is extremely tough.

Every year, millions of contracts are signed from coast to coast for everything from homes, cars and business dealings, to just name a few, but how many of us really understand what a contract is and what legal responsibilities are part of signing and being part of a contract. Let’s take a closer look at how the average contract works and what they mean for you and me.

A contract is a legally binding volume of agreements or promises that is enforceable by local, state or federal law. If a contract is broken, or breeched, there are legal remedies at hand to resolve the situation. If a contract is missing any of these qualities, it isn’t considered to be a traditional contract. A percentage of contracts are made with pen and paper, like when you buy a new car or when you buy a home. However, the overwhelming majority of contracts are oral, meaning they are spoken agreements between two people. If you buy a hamburger from your local fast food restaurant, you have an oral contract that you will pay this set amount for food that is of a certain quality and of a certain specification. If the food fails to meet that, you can get a refund of your money or new food. Most people don’t consider these types of arrangements contracts, but they are.

Most written contracts can be broken down into the same basic sections. The first section is almost always where the parties involved in the contract identify themselves and define who they are, where they live and what their roles are from here on in. From there, most contracts then define the situation (selling/buying a car, home or whatever other financial agreement is taking place). The final part of the contract is usually where the specifics are hammered out and any point by point details that set this particular contract apart from similar ones is detailed. Both parties sign and date at the end and the contract is complete.

Even though most of us enter into far more oral contracts on a daily basis than written ones, it is always a good idea to get any high dollar oral contract down on paper to ensure that everyone’s rights are protected and that no one tries to renege on the contract at a later date.

Contracts can be illegal if they purport an illegal activity or an illegal exchange of goods or services. Some contracts can be undone because of one illegal clause or section in an otherwise legal contract. Even a single type can render an otherwise expertly written contract null and void, so it is always a smart move to enlist the help of a lawyer or other contract expert if you need one drawn up.

There are a host of legal remedies available for those that are suffering from breech of contract, such as suing to receive damages and to have the contract enforced. Check with a lawyer to see what legal options you have if you feel that a party has backed out of a legally binding contract.

An employee agreement, or as it is better known, an employee contract, is a simple legal document drawn up by an employer for an employee to sign. It outlines everything from the terms of the work environment, the length of the employment, the financial terms of the agreement and is usually contains a clause or two about privacy or confidentiality. Many people don’t realize that they sign an employee agreement when they start their job, but it is almost always part of the initial job application or part of a form you sign once you’ve been hired. Corporations use standard employee agreements for low wage earning employees but may need to create individual agreements for high ranking officials who have unique job descriptions and access to company secrets. The longest employee agreements are usually for unique positions that garner huge wages, such as a professional athlete or a president of a major corporation.

The point of an employee agreement is to protect the hiring company in case the employee attempts to seek some kind of legal assistance during or after their time of employment. An employee agreement will almost always outline the terms under which the employee can be fired or terminated and what the obligations are by both parties should that happen. It is often this part of the employee agreement that is debated in court cases for wrongful termination or if someone feels they weren’t given the severance package they were promised in their contract.

Sometimes, even extensive employment agreement contracts are made from templates, but it is uncommon. Sports leagues have set employment agreements in place for “rookie” players that can’t be changed under the collective bargaining agreement in place in that particular sport.

Other essential parts of an employee agreement include a complete outline of the benefits offered, if any, by the employer, how long they last for, and all the essential details regarding how they work. There is often a clause about reimbursement of expenses during the length of employment. Again, this wouldn’t apply as much to low level employees, but would to high ranking officials that require a travel allowance. There can even be a miscellaneous section at the end of the agreement that goes over any and all provisions that couldn’t be fit into the contract anywhere else. They can include an outline of local, state or federal laws that pertain to the employment contract and termination by the employee details.

Overall, the average employee agreement only covers two to three pages, maximum. Even template based corporate employment agreements that masquerade as employment applications seldom run over two pages, although the fine print is particularly fine. A more complex employment agreement can run dozens or even hundreds of pages if the work is sensitive enough and the employer feels that they need to spell out every minute detail to protect their interests.

While you may not even realize it, almost everyone working today is working under an employment agreement of some kind.

A license agreement is one of the most common and straight forward types of contracts out there. It essentially gives license, or permission, for someone to use something created by another person. Examples of a license agreement would include a character from one television show showing up on another show or a product, such as Febreeze, being used and marketed as part of another product. License agreements tend to be simple at the onset but can become quite bogged down in legal mumbo jumbo if a company is concerned that the license agreement is going to be abused or misused in a way that could harm the original license holder.

One of the most popular uses of a license agreement is to protect intellectual property. The license agreement is necessary to prevent possible legal action by the inventors of the intellectual property that is being used. For example, say Microsoft invents a particular piece of computer software that is then included in a larger suite of software released by another company. That company would need a license agreement to release and make money off of the original software developed by Microsoft. Not only would the license agreement give permission to that company to release and profit off of Microsoft’s invention, but it would also outline how Microsoft would get paid, for how long and for how much.

Another example in which a license agreement is often used is with the sale of personal computers. When a personal computer is sold, it often contains dozens of software programs already installed on it, and not all of them are from the same manufacturer. That means that the company that is selling the computer needs a separate license agreement with every company who has software preinstalled on that particular computer. All of this is outlined in the end user agreement that comes with personal computers. Some companies don’t allow hard copies of their software to be included with the shipment of a new computer, instead, they only allow the one copy that is installed to exist and that’s it. This is mostly done because they fear that pirated copies will be made and they will lose revenue.

License agreements are also used if a company wants to use another company’s trademark. Sometimes companies will enter into advertising agreements, such as when McDonalds advertises the latest Hollywood hit film, they will use that film’s trademark in their own advertising. When this happens, you will need a license agreement that covers trademark use. The agreement would have to cover how long McDonalds would be able to use the trademark and for what type of advertising. Again, the basic agreement is actually quite short but when it is padded out with extensive rules and regulations, a license agreement can become quite lengthy.

As you can see, a license agreement is a vitally important form of contract that can help companies share everything from products to images to trademarks safely.

One of the most popular types of contracts and one of the most commonly used when two corporations or companies are exchanging sensitive information is a non-disclosure agreement. Known mainly outside of the United States and Canada as a confidentiality agreement, the non disclosure agreement is considered a common type of contract when two corporations or when a corporation and an individual are exchanging sensitive or valuable information, such as secret ingredients or recipes to a popular product, or any other information that a company believes will damage them if it were to become public. These agreements usually aren’t very long and are quite straight forward. Some non disclosure agreements can last just a few weeks, much like a media blackout on a trial, or they can last weeks or even years. Some non disclosure agreements can even last in perpetuity, so that the details of the contract or arrangement can never be talked about or the agreement becomes null and void.

Another popular use for non disclosure agreements is among companies and employees. This can even extend down to companies and minimum wage employees who will come into contact with computer systems or business techniques that the company feels would benefit their competition. For example, for many years, Viacom’s Blockbuster Video made all new employees sign a non disclosure agreement as well as an agreement that forbade employees from working at any other video store or chain for a period of time after their employment at Blockbuster was ended. It was thought that certain aspects of working at Blockbuster could be shared and disseminated to their competition and that dissemination would cause harm. Similar agreements are signed all the time, especially if you are a high ranking employee of a company and you have access to trade secrets or other sensitive materials.

Some companies even go as far as stating that the existence of a non disclosure agreement can’t be disclosed. The idea is that once a NDA is admitted to, than both parties involved are admitted that they have something to hide.

Most NDAs contain the same basic sections as they usually aren’t long or complicated contracts. First, both parties involved in the agreement are defined and basic information on both sides is given. Next, the NDA will define what can’t be talked about and what the essential point of the contract is. Some complicated NDAs will even define each and every term that can and can’t be used by the parties involved. Some NDAs can be extremely detailed and particular, but this isn’t what many people would consider to be an “average” NDA. Next, the NDA will spell out what can be talked about and what is considered fair game. A period of time in which the NDA is in effect is often spelled out next. Finally, the NDA will spell out the ramifications of what can or will happen if the contract is violated.

As you can see, the average non disclosure agreement is pretty straight forward and is used to help protect industry secrets from becoming public knowledge.