Incorporate Your MLM Business Continued - Page Three

By Jeffrey Babener, © 2013
Capitalization

At this point, your attorney will work closely with your CPA.  What will be the total initial capitalization or funding of
the corporation?  Will shareholders make loans to the corporation and contribute the rest as equity capital?  What
is being contributed by respective shareholders in subscription to stock: money, past services, equipment, assets
of an ongoing business, licensing agreements, or other contributions?  What value will be placed on assets which
are contributed to the corporation?

Key Employees

The inception of the corporation is a good time to consider employment agreements with key employees.  Also to
be considered are confidentiality agreements with key employees who have access to special technology, trade
secrets, or customer financial and manufacturing information that is proprietary to the business.  At the same time,
noncompete agreements should be considered for key employees and possibly for officers and directors.

Employee Plans

Be prepared to talk about future plans for employee benefit plans, such as profit sharing plans, pension plans,
stock option programs, fringe benefit programs, medical reimbursement plans, etc.  If not implemented at the
inception of the corporation, it’s good to have in mind when and where such programs may fit in at a later date.
Basic, Advanced and Beyond

As you can see, there is much to discuss when you decide to incorporate.  A little time, effort, and organization will
pay off handsomely.  Good luck!

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