Where to declare startup officers?
I co-founded a company recently, and we incorporated as a Delaware C-Corp.
We listed President/Secretary/etc when filing, but we simply decided CTO, CEO, and CFO. I've heard from others that what is listed initially when filing (CTO, CFO, COO, etc.) is not quite official.
When signing the vesting agreements, the corresponding officers did list their positions as such. This is also in the minutes for our board meetings.
Where is the correct place (if any) to legally place this in documents?
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Kgrover, as you've mentioned in your e-mail to me, you are not 18 yet, hence any of the documents you have signed are not legally enforceable. Equity issues come into play there too. – Apollo Sinkevicius 11 years ago
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Apollo's assertion "you are not 18 yet, hence...the documents you have signed are not legally enforceable" is wrong: (1) DE appears (I haven't found any case law) to allow minor incorporators. See "May a Minor Form a Corporation?" at http://dana.sh/JWE9m8 . (2) The idea that agreements, or other documents, signed by a minor are unenforceable is a common misunderstanding. To the contrary, the risk typically is to the counterparty, because the minor generally has the right to disaffirm the agreement. See "Contracts with Minors can Lead to Major Problems" at http://dana.sh/Q2ogQw . – Dana Shultz 11 years ago
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Dana, I am aware DE and even CA have no age limits on incorporation. I am not an attorney, but in 17+ years I have dealt with legal docs, every convertible note, NDAs, etc. etc. etc. agreements I have seen required to be an individual to be of legal age to become party to it. – Apollo Sinkevicius 11 years ago
2 Answers
Typically, the correct place is in the minutes. The bylaws of the corporation will usually describe the various officer positions, their responsibilities, and well as how officers and directors are appointed. Once the bylaws are established, the method to appointment is usually just a resolution of the board in keeping with any requirements in the bylaws. There is no need to have the names of officers or board members in the filed certificate of incorporation.
(The above is not legal advice and does not create an attorney/client relationship between us)
As much as I know from my experience, the only people to be listed are CEO, President, and directors on the board. There is no need to list others. If there are any employment law violations (once you go above the threshold of your state), lawyers will go after CEO and President. Others aren't really considered "officers" until company is public.
Also, I would highly encourage you all to stick with "co-founder" titles. Without employees, having all those titles is, well... just an indication of lack of humility (turn-off for early investors, or at least the ones I have worked with).
Co-founder is a lot more noble and credible title anyway.
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We do have some employees and interns. Thanks for the answer. Where would you list the _people on the board_, say if someone is added to the board. Is it ok to just declare it in the meeting's notes? – Kgrover 11 years ago
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Ah yes, love these downvotes. I know it comes from those who never invested or had to deal with professional investors :-) – Apollo Sinkevicius 11 years ago
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Sorry, Apollo, I downvoted your answer because you provided wrong information: (1) There is no need or good reason to identify CEO, President or directors in the Certificate of Incorporation. (2) The assertion that officers do not exist until a company goes public has no basis in fact and makes no sense. You also made mistakes in your comments about a minor forming a corporation - I will provide correct information above. – Dana Shultz 11 years ago
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So my answer was not wrong in principle, only terminology used was not right. Re. 1. You know in practice most C-crops will have CEO and President as directors on the board, so they will be listed. 2) You are misconstruing what I am stating. 3) Re. minor status, in law firm world maybe, in real world I am not wrong, since I can give you mountain of docs I dealt with excluding minors. – Apollo Sinkevicius 11 years ago
