Jul 132011
Series AA Financing Documents for NC Corporations

The Y Combinator, an incubator in Silicon Valley, publishes a set of documents for use in the first financing round of early-stage companies.  The documents provide a fairly simple and well-understood set of terms for a financing, centering on a “non-participating” liquidation preference — if the company is sold or liquidated, the investors have to choose between getting their money back (or at least as much of it back as is left) or sharing with [...]

Feb 242011

Money: it’s why people start businesses (to make money) and form corporations (to protect their own money).  Yet, for some reason, the issue of money often doesn’t enter into the equation when deciding where to form a new company.  For early-stage companies, it should.  Here’s a little comparison of the various costs of incorporating in North Carolina and Delaware for a company that will be conducting all of its business in North Carolina, and running [...]

Jan 062011

The quality of the Delaware Secretary of State’s office is often given as a reason to choose Delaware as a corporation’s home state.   But, how does Delaware’s Secretary of State stack up against North Carolina’s? Every state has some agency that’s responsible for creating new business entities, recording their filings, and making that information available to the public.  Among other things, that agency checks corporate charters to make sure they meet the legal standard [...]

Dec 282010

We corporate lawyers have a standard list of reasons why companies should incorporate in Delaware instead of another state. I thought I’d look at some ways that those reasons don’t actually play out how we think it should. One of those reasons is the Delaware Court of Chancery, which hears cases about the internal affairs of Delaware corporations. The Court of Chancery is extremely well respected — its judges are considered global experts in corporate [...]