Delaware Corp. Doing Business in California

[help me 5]

My question involves business law in the state of: Nevada/Delaware/California

i want to form a Nevada OR Delaware corp. and buy an existing business (sole prop) in California. the business is to remain in California and i want to hire the sole prop. to run it or consult for a period of time. i am buying it for it's current liabilities and a small cash consideration. equipment and property are free and clear. only tax debt is current inventory. current owner has personal debt not tied to the business.

i understand i have to file for foreign corp status in California. i know how to file for a corp. myself. i know i need a T.I.N. for the corp.

i want the new sales tax permit in the corp name.
i want the business license in the corp name.
i want business checking in the corp name.
i want vehicles in the corp name.
i want insurance in the corp name.
eventually credit in the corp name.

what are the steps for the above?

what are my pros and cons???

can a debt collector of the sole prop. take the assets of the business if they now belong to the corp. and he(sole prop) has the legal right to sell them?

please advise or point me in the right direction. thx

[SChinFChin]

Yes, I've bought an ongoing business here in NYC. In the purchase of the business, there is a "bill of sale", and it lists the business equipment, inventory, good will including the "business name". To be absolutely safe, ask for an exclusion list if the owner decides to take anything home. There is also a non-compete from the previous owner as well as hring them on a consulting basis for a period of time. As to your specific questions:

- When I incorporated the business that bought an ongoing business, actually had a CPA doing it, and had him applied immediately for a sales tax certificate for the new company, right after he got the TIN#. Nothing complicated, you'll just need a TIN# to get the sales tax certificate, as I did it myself for other businesses I started.
- Applied for a DMV, and other permits under the new name, and for continuity purposes and as part of the purchase agreement, have permission to use the license and permits of the prevuous business on an intermim basis, so the business won't have to close while awaiting the licenses.
- Got a business checking right away, its easy enough as all you'll need is a corporate resolution. The trick here is determine who is the President/Treasurer, and someone else has to be secretary to certify the board resolution, that you are the President/treasurer, as you can't also be secretary as well as treasurer.
- Go ahead and get your vehicle, no problem here.
- Get a good insurance agent, and get your insurance right away. I started some businesses besides buying them, and I rather pay a bit more to have an insurance agent I can rely on, rather than waste my time figuring the insurance out, even though I worked at an insurance company for a few years.

As to the issue of debt collectors coming to take assets of the business, what makes you worry about it?? You said the equipment is free and clear, right?? You'll have a bill of sale for the purchase, so that should protect you, but if you are really worried about it for some reason, one way is to place UCC filings on the equipment. Now I believe the owner can't place UCC filings on his own equipment himself, (like an owner of a house can't place a lien on his home using his own name) but you can form another company, or have the filings in your own personal name, like you are a creditor to the corporation. The reason why I mention this is I was a credit manager for a while, and one thing we do is the check on public filings for a company in trouble with us, and if we see UCC filings all over the place, then we'll say "forget about it, we just can't grab anything". It's like seeing a debtor with a $200,000 home, and then see the home already has a $200,000 lien on it.

[Conrad Hunter]

Nevada makes much more sense than Delaware. The advantages of Delaware are mainly in cases of corporations with a large number of stockholders, big companies subject to hostile takeover and other things that don't really affect any small company. The thing is, unless you need that extra layer of corporate obstification, you will be paying two incorporation fees, plus two annual fees. You will have to register in CA as a foreign corporation and the fees are not any less than if you just form a corporation in CA.

[help me 5]

i had a Nevada corp. before. too much info was disclosed to third parties. i would like to keep it as private as possible. i understand when one gets a TIN they have to state a personal SSN (at least that's what it was back in 2002) i really do not what to be on someone's search findings and spam mailing lists. my name is pretty common, but i do not want my SSN number out there for all to see. too easy to find it with a Nevada corp.

i feel by using a Delaware corp. i can remain pretty much private.(according to info i have read here and on other sites) i do not mind the extra $200 and $800 a year for filing status in California and Delaware. this business is not going to make me millions, just enough to live on and not be forced on the government dole.

does anyone know exactly about the disclosures aspect of a Delaware and foreign California corp?

again, sales tax cert, existing cars in business any tips and or tricks to help. thx