A corporation is a creation of the state because its life is depending on state lawsƒ¤. It does not exist any general federal corporation law that governs the structure and the function of private corporations, but there are several federal laws, such as securities laws, labor laws, antitrust laws, consumer protection laws, environmental protecti

The directors or incorporators adopt the bylaws which are a rules adopted after the incorporation procedures are completed and include provisions about the management and affairs of the organization. The bylaws are more detailed than the charter and bind on the directors, officers and shareholders. The bylaws are adopted at the organizational meeting, after the articles of incorporation are filed. This meeting is held by the directors where they elect officers and transact other business. General in organizational meetings many business processes take place such as accepting share subscriptions, approving the form of stock certificate, authorize the issuance of stocks and many other.

Under the Revised Model Business Corporation Act the existence of corporations start when the articles of incorporation are filed. After that only the state can challenge the status of the corporation, third parties cannot .

All corporations must have a registered office with a registered agent which is a person or a corporation that is empowered to accept service of process on behalf of the corporation. It is the principal office of the corporation and it does not have to be the same as the corporation¡¦s place of business. The agent can enter into binding contracts for which are personally liable.

When the corporation has been created the shareholders elect the board of directors before business begins. The number of directors is fixed by the charter and it can be amended in the charter or the bylaws.

Henry must take these essential steps if he wants to form this kind of business. In order his corporation to be elected as S , it must meet certain criteria. Stockholders must be US citizens or residents and the firms¡¦ profits and losses may be allocated only in the proportion to each shareholder¡¦s interest in the business. An S corporation shareholder may not deduct corporate losses that exceed his¡¨ bases¡¨ in his stock ¡Vwhich equals the amount of his investment in the company plus or minus a few adjustments and such corporations may not deduct the cost of fringe benefits provided to employee-shareholders who own more than 2% of the corporation. It also must have no more than 35 shareholders, only one class of stocks and it must be a domestic corporation which is a corporation in the state in which it was formed.

In our case , Henry wants to incorporate. For his own convenience

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