MBAX 6860 – BOOTSTRAP TACTICS FOR ENTREPRENEURS SPRING 2007

WEEK 2 – Jan. 26: Business Formation

Topics:

1. Forming a business

2. Different entity formations
a. advantages
b. disadvantages
c. tax and non-tax considerations
d. checklist of tasks to complete
e. cost involved for each
f. a no money/bootstrap perspective
g. pitfalls to avoid
3. Naming of company
a. legal considerations - TM search, importance of protection, cost involved
b. pitfalls to avoid
4.  Equity structure - stock, options, warrants...
a. planning around this, # of shares to issue if applicable,
b. pitfalls to avoid
5.  Overall legal and accounting considerations for a company at the start-up
stage
a. must do's
b. pitfalls to avoid

6. Bank accounts

7. Forms & more forms

Speaker: Chris Hazlitt

-Chris Hazlitt Presentation

Discussion Slides: Week 2

Read for next week:

1. Inc. (Nolo). “Which legal form is best for your business?”.http://www.inc.com/articles/2000/06/19438.html

2. Teton, Lauren. “Name your company or product in 5 easy steps”.

3. Traverso, Debra. “Top 10 Steps to Selecting the Perfect Name for your Business”.

4. Kreschner, Irving. “Relationship between patents, trademarks, and copyrights”.

5. Kreshner, Irving. “Patents, trademarks and copyrights”.

Tasks to be completed for next week:

1. Create a framework for your business: (provide in bullet-point form)

a. ID pain

b. solution – concept description

c. market size / opportunity

d. competitive advantage

e. management

f. how you will make money / early revenue model

2. From (1.) above, create an Executive Summary. You won’t have all the information you need/desire. That’s OK. Make a rough estimate where you’re not certain.

We’re focusing on the process more than the details. Please refer to Moyes and Lawrence’s document for further guidance. In addition, here is an example.

3. Complete all business formation documents: (DUE 2/2/07 OR 2/9/07)

1. ____ Company Name. Choose a name for your company; write a brief paragraph explaining how/why you chose this name.

2. ____ Trademark Search.  Undertake a trademark search of the name to verify that the name is available (attach a single page from your trademark
search indicating that your name is available). 

o US Trademark Search on the US Patent and Trademark Office website

o Colorado Trademark Search on the Colorado Secretary of State's website

3. ____ Register Name.  Complete form to register your name with the State of Colorado (attach). This available on the Colorado Secretary of State
website. Print the form and complete or simply include a “print screen” : Register Name State of Colorado.

4. ____ Company URL. Choose a URL (web address) for your company and verify that it is available (attach a single search page indicating that your URL is available).

· Check out  www.Register.com or www.godaddy.com for URL availability (there are many others)

5. ____ Company Legal Form.  Decide on the legal form of the business you are going to start (e.g., LLC, S-Corporation, C-Corporation, etc.). 
Write a paragraph explaining why you chose this form rather than some other (attach)

6. ____ Legal Formation of Company.  Fill out the paperwork required to form your company in Colorado (attach).  Forms are available on the
Colorado Secretary of State website. Select “Filing a Document, Creating a New Record”. Complete form, print, and attach. Do not “submit” unless you’re actually starting this business.

· Articles of Incorporation for a "For Profit" Corporation (both S and C), or

· Articles of Incorporation for a Nonprofit Corporations, or

· Articles of Organization for a Limited Liability Company

· Certificate of Limited Partnership

7. ____ IRS EIN Filing. Fill out the IRS paperwork (Form SS4) needed to register your company with the IRS and receive an Employer Identification Number (EIN) --
this number is required to open up a business bank account.  (Attach Form SS4)

8. ____ Legal Organization of Company.  Create organization documents appropriate for your form of business (attach). Samples can be found by searching the internet.

· Partnership Agreement

· LLC Operating Agreement

· Corporation
    Corporate Bylaws
    Stock Agreement

9. ____Bank Account Application. Complete a bank application form as well as a merchant account application (attach). Write a brief paragraph of why you chose this bank.

10. ____Office Space Lease. Call around for lease rates for a small office space. Complete a sample lease (attach). Describe in one paragraph what kind of office space you will use and why.