At the Copeland Law Firm, we love dealing with entrepreneurs and emerging growth companies, it is our passion. We have advised many entrepreneurs on the formation of new companies, capital structures, financing transactions, employment matters, intellectual property matters, as well as provided counseling on day-to-day legal issues that arise in startup companies. Our clients cover a wide range of industries including software, technology, energy, real estate, insurance, healthcare, manufacturing, construction, advertising & marketing, publishing, and retail.

We realize that not all startups are alike, therefore we offer a range of flat-fee packages and add-ons, so you only pay for what you need when you need it. We will help you figure out what is best for your individual company and we won’t sell you anything you don’t need.

Our most comprehensive startup package calls for the formation of a new Delaware corporation structured for a venture capital investment, registered to do business in the home state, and contains everything you see listed below. This comprehensive package is offered for an up-front fixed fee cost of $2,500 (plus out-of-pocket expenses, such as state filing fees in Delaware and the home state, if applicable). For an additional cost we can establish a payment plan or work out a deferred fee agreement.

Our startup organization package consists of the following documents and services:
• Incorporation and Organization
• Founders Stock
• Stock Option/Stock Issuance Plan
• Employment and Consulting Matters
• Intellectual Property Matters
• Consultations

Incorporation and Organization

• Reservation of corporate name, if necessary
• Preparation and filing of Delaware Certificate of Incorporation
• Preparation of Bylaws and Certificate of Secretary
• Preparation of Action By Incorporator

Preparation of Organizational Board Consent regarding the following matters:
• Ratify actions of Incorporator
• Approval of organization expenses
• Adoption of Bylaws
• Authorization of principal office, foreign qualification, fiscal year and Employer Identification Number
• Designation of the size of the board of directors and election of officers
• Designation of management powers
• Approval of issuance of Founder’s stock
• Approval of stock option grants to Founders, if applicable
• Approval of minutes books, corporate seal and stock certificates
• Approval of subchapter S election, if applicable
• Authorization to open bank accounts
• Approval of form of Proprietary Information and Inventions Agreement
• Approval of form of Indemnification Agreement for officers and directors
• Approval of Stock Option/Stock Issuance Plan and forms of Option Agreements

• Preparation and filing of Form SS-4 Application for Employer Identification Number (and state tax application for the home state where the business is located)
• Preparation and filing for registration as a foreign corporation in the home state where the company is located, if applicable
• Preparation of corporate records book

Preparation of Stockholder Consent regarding the following matters:
• Approval of form of Indemnification Agreement for officers and directors
• Approval of Stock Option/Stock Issuance Plan
• Preparation of form of Indemnification Agreement for officers and directors

Preparation and Issuance of Founder Stock

• Preparation of Founders’ Restricted Stock Purchase Agreements for up to four Founders (with standard vesting terms)
• Preparation of Stock Certificates and Receipts for up to four Founders
• Preparation of 83(b) Elections Memorandum for Founders
• Preparation and filing of state securities documents for stock issuances to Founders

Preparation of Employee Stock Option/Stock Issuance Plan

• Preparation of form of Early Exercise Stock Option Agreement
• Preparation of form of Standard Stock Option Agreement
• Preparation of form of Stock Issuance Agreement
• Preparation and filing of Form U-2 Uniform Consent to Service of Process (in connection with securities filings)

Employment and Consulting Matters

• Preparation of form of At-Will Employment Offer Letter
• Preparation of form of Proprietary Information and Inventions Agreement
• Preparation of form of Independent Contractor Services Agreement

Intellectual Property Matters

• Preparation of form of Unilateral Nondisclosure Agreement
• Preparation of form of Mutual Nondisclosure Agreement
• Preparation of Assignment of intellectual property from Founders to the company
• Preparation of Memorandum re Trademark Matters for a new company

Consultations

Up to five hours of consultation regarding all documents drafted as part of the package, to be allocated however you see fit but typically broken down as follows:
• One hour regarding Venture Capital, Angel funding, and Private Placement
• One hour regarding Founders’ Shares and Vesting
• One hour regarding Stock Options
• One hour regarding Intellectual Property
• One hour regarding Employment Matters

Par value is the minimum price that a share can be sold for. This is typically the price founders pay for their shares, although sometimes I recommend issuing founder shares at a multiple of par value (i.e. Par Value x 10) in order to avoid problems down the road if the company needs to execute a forward stock split and the value of the shares hasn’t increased much. This avoids the situation where a forward stock split would require the new share price to be below par value, something not allowed.

Par Value Price

For stocks, I typically recommend par value be set somewhere between $0.001 and $0.0001. Some states such as Delaware and Texas allow for issuance with no par value, but this can create other unintended consequences. For example, issuing shares without par value in Delaware triggers a different franchise tax calculation, usually resulting in a higher franchise tax burden. This can be easily avoided by setting a par value.

Example

For example, a startup company authorizes 10M shares with a par value of $0.0001, with 8M shares set aside for two founders, split 50/50 between the two. The lowest price each founder would have to pay in exchange for 50% of the shares is $400.00 (4M * $0.0001). Payment of the $400.00 could be made in cash, contribution of services, or contribution of property (real or intellectual), whatever the founders decide is fair for the situation.