Start limited company formation with us
We offer popupar and secure payment methods
Home Incorporate in USA Register a Public Limited Company in USA
OFFICE
  • Company Formation Agent
  • Company Registration Agent
  • Company Incorporation Agent
  • Company Start-Up Agent
  • Business Registration Agency
  • Business Formation Agent
  • Business Start-Up Agent
  • Companies Formation Agent
  • Companies Registration Agent
  • UK Registered Agent

Register a Public Limited Company in USA

Why Form Delaware Corporations? Incorporators; How Corporation Formed; Purposes

Any person, partnership, association or corporation, singly or jointly with others, and without regard to such person's or entity's residence, domicile or state of incorporation, may incorporate or organize a corporation under this chapter by filing with the Division of Corporations in the Department of State a certificate of incorporation which shall be executed, acknowledged and filed in accordance with § 103 of this title. A corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes, except as may otherwise be provided by the Constitution or other law of this State. If the persons who are to serve as directors until the first annual meeting of stockholders have not been named in the certificate of incorporation, the incorporator or incorporators, until the directors are elected, shall manage the affairs of the corporation and may do whatever is necessary and proper to perfect the organization of the corporation, including the adoption of the original bylaws of the corporation and the election of directors. If you are selling goods or services, you need to consider forming a corporation or limited liability company for your business activities. One of the easiest ways to do this is to enlist the help of the Delaware company that probably does more of this work than any other company. Coddan can form corporations or register limited liability companies for you in any of the 50 States; it can also qualify your company to do business in any State or file an alternate company name (trade name). We have designed our web site so that you can order online a Delaware corporation or limited liability company. In most cases, we will have your organizational certificates filed with the Delaware Secretary of State by the next business day after we receive your order. If you want to become familiar with the description and the contents of Delaware company formation packages, offered by Coddan and to find above, what kind of service is included in this or that Delaware companies incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company registration within State of Delaware, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.

Why form Delaware Corporations? The main reasons for Incorporating in Delaware are as follows:

  • Creating a separate legal entity for personal protection
  • Building corporate credit
  • Separate liability for corporate debts
  • A broad range of powers beyond that of a sole proprietorship
  • Anonymity
  • Tax Savings
  • Law Suit Protection
  • Small claims court benefits
  • Perpetual duration
  • Creditability
  • Deductible employee benefits
  • The ease of raising capital

When a sole proprietorship or partnership is sued you risk losing your personal assets. When you incorporate in Delaware a separate legal person is created, protecting personal assets. As a shareholder, officer and/or director it is possible to have control over Delaware corporations.

Thousands of businesses have been right where you are now - deciding to incorporate and deciding to use Coddan. We provide a user-friendly service for you to incorporate online today in one easy step. Protect your business and personal assets, share in the fringe benefits of a corporation, and lower your tax bill along the way. You’re moving forward with your business, Coddan can help. Known as the Diamond State, Delaware is the home to more than half of the Fortune 500 corporations, and many small business owners around the globe have also incorporated in Delaware for a number of reasons. Delaware is also know as the First State because it was the first state to ratify the Constitution of the United States. As the second smallest state in the country, Delaware has always had to work smarter, and its home page shows some of that smart work. It is an interesting looking, and well organized page that makes it very easy to find information about all that Delaware has to offer.

Incorporation by Coddan: Incorporating Plans at Affordable Prices in all USA, EU and UK Delaware Corporations and LLCs Registration Packages & Costs | (Price Includes Standard State Filing Fees!)

We specialize in the forming, maintaining and utilization of Delaware corporations and Delaware Limited Liability Companies for people and businesses worldwide. We register corporations and LLC's in 50 states for U.S. & international clients. Whether you want a full office with nominee officers or just resident agent service we are here to help you through every step that your business may take. At Coddan we assist clients with the first step of incorporate a company, we can assist you establishing your business with minimal effort and time. We provide our clients with full expert assistance throughout every step of the formation process, however our service does not stop there. We will give you any assistance or advice related to company formation matters from the moment you choose to incorporate with us and for as long after incorporation as you may require. An addition to our service is the continuous online support for all our clients via the Internet (LiveChat), Telephone and Email. Clients may even register for their companies with us online, a quicker and more accurate procedure for launching your company. If you have any questions please E-Mail or call us: 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531.

How to Incorporate a Corporation or Form an LLC Online You May Use This Link to Register a Corporation or Form an LLC |

Incorporating in Delaware or registering a company in Nevada has the greatest tax benefits to you and your company. By forming a Delaware corporation you can begin to live the corporate lifestyle with unparalleled tax savings, asset protection, and privacy. When you incorporate a business you begin to unlock many options for yourself and your business. The proper incorporation of your company and record keeping provides a corporate veil that will keep you and your business safe from lawsuits, tax troubles, and even prosecution. By filling your SS-4 forms, and receiving your corporations (or LLCs) EIN number, you are no longer taxed individually but as a corporation. Let Coddan' experienced tax consultants optimize your tax position today!

Coddan offers online Delaware, Nevada, California and Florida business incorporation services. At Coddan we assist clients with this step of business incorporation by reviewing the goals and individual facts of each situation to recommend the best entity - selecting from limited or general partnerships, limited liability companies (LLC) and corporations, and the different elections or options available under each. Key to your Delaware incorporation is your research and review of the various forms of incorporation options and how each business registration structure differs in form, purpose and regulatory requirements. Your Delaware incorporation options include for profit corporate structures such as the standard C Corporation or the related Subchapter S Corporation, or for special purpose entities the non-profit incorporation, or the somewhat new and highly flexible Limited Liability Company or LLC formation option. Equally true, Delaware registration to an overseas person or firm would potentially be a practical move when considering offshore registration in the widest international context of competing jurisdictions. We offer a quick, simple, and inexpensive way for anyone to incorporate or forming an LLC online. We hope that this site will help us towards achieving this aim and we would welcome any feedback which you may have. We offer a choice of companies incorporation packages to suit your practice requirements. We do not cut costs on expertise and quality but still maintain a cost effective pricing structure. Many agents say they provide these items but will only actually complete them at an extra cost. All you need to do is fill out our online order form, and we'll take care of the rest.

Delaware LLC Formation Package - £100.00! Delaware LLC Formation Packages & Costs Place Your Order Online | (Price Includes Standard State Filing Fee)

The time the state requires to approve and return your completed Articles of Incorporation varies by state. On average, it takes 4-6 weeks to become incorporated. Most states will allow you to expedite the filing process for an additional charge; expediting filings typically take about few days. Those charges also vary by state. Our services include preparation and filing of the following types of documents:

  • Name Clearance, Reservation and Registration
  • Incorporation (or Formation)
  • Qualification (or Registration)
  • Amendments and Restatements
  • Limited Liability Company Formation and Amendment
  • Limited Partnership Formation, Amendment and Termination
  • Mergers
  • Annual Reports
  • Assumed Business Name
  • Mail Forwarding Service
  • Obtain Employer Identification Number – EIN Application Form
  • Preparation of Subchapter S Election Application
  • Registered Office & Registered Agent Services
  • Payroll and Tax Services
  • Notary & Apostille Legalization Services

Live Help

Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors. Besides English, we have several customer service representatives who speak Spanish, German, Franch, Polish and Russian. Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable. If you have questions please E-Mail or call us: 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531.

Reverse Mergers / Shell Companies. Going Public Without The Cost Of An Ipo!

Many successful private companies are ready to make the transition to the next level by going public. But for some reason they may not be in a position to complete the process of going public through an Initial Public Offering (I.P.O.). Some companies may not need the money from an IPO but still desire to go public. Other companies may not be able to produce the historical financial statements needed to complete the filing requirements. Or there may be some other reason for wanting to go public without completing an IPO. The alternative method of going public is to merge with a company that is already public.

There are many companies that are already public but do not have any operations. The private company that merges with one of these companies would be completing what is know as a reverse merger. In a reverse merger the private company's operations would continue and legally the public company would continue. The net effect is that the private company is now public.

There are hundreds of public shell companies available for reverse mergers. Some are actively traded and some are not. The cost of these companies can vary greatly. You can find one by contacting the usual suspects. As a first stop, ask an attorney. Every metropolitan area has a law firm with a securities practice. Often, these firms have a dormant public company sitting on one of the partners' bookshelves.

Another alternative is an accountant. People who control shell companies tend to keep the financial statements; such as they are, up to date. This brings accountants into the loop. Like attorneys, they know where the bodies are.

Another source is financing consultants. In fact, many actually have a couple of clean public shell corporations formed for the purpose of taking companies public through a reverse merger. These made-to-order (blank checks) shells come without the baggage of business failures in their background can sometimes be the way to go.

But there's often a cost involved. That is, you will most likely end up with the financing consultants as minority shareholders in the new company, holding between 2 percent and 5 percent. However, in almost any reverse merger transaction, the principals of the shell company keep a small equity position in the company going forward. Therefore, this surrender of equity is simply a cost of doing business.

Your Company Can Go Public On The Over-the-counter Coddan In 30 Days By Merging With A Non-reporting Shell Company!

We have shell companies established for the purpose of acquiring or merging with operating companies that wishes to go public in the USA on the over-the-counter UKINCORP. These non-reporting shells are clean, have never conducted any operations since inception, and are ready for restructuring, according to a buyer’s specific needs.

Name change through the State of Delaware, stock symbol and Cusip # issued by Cusip Service Bureau and NASDAQ Market Equities;

15c2-11 information & disclosure statement prepared and filed through the UKINCORP;

Restructuring according to buyer’s needs – 95% + deliverable;

Public float created by a specific type of private securities offering in a state where there is an available exemption from registration requirement for issuance of shares of up to US$1 million to accredited investors only.

All legal fees for restructuring the shell through a reverse merger is included in the purchase price of £100,000, with flexible payment terms.

To begin the due diligence process, the seller requires a deposit of £25,000 and the balance payable when the company is public and trading on the over-the-counter UKINCORP. The buyer will have a new board of directors; a new stock symbol quoted with market makers, and will be fully trading as a public company.

Go Public Today By Reverse Merger

Too much has been written about the process of taking a company public and the benefits of active participation in the global equities market. Almost all of this information focuses on the "traditional" IPO (Initial Public Offering) and working with an underwriter. This is the world of big money with all its associated glitz and hype. The IPO is regularly touted as "the right way" to take a company public, anything else is suspect. Over the years we've found that what makes an alternative approach suspect is directly related to the experience of the group that's pitching you their services.

Keep in mind that when you contract with a consulting group or underwriter to conduct an IPO you essentially turn over control of the process, and the future of your company, to a group of outsiders whose prime goal is to make as much money off your deal as they possibly can.

There are a variety of alternative methods to the IPO that can be used alone or in combinations. Each of them will provide you with:

Access to the public financial markets; and

Create an exit strategy for you and your investors.

These are generally the two main objectives for any company looking to go public. Three key benefits to using the alternative approach.

Control Over Value

Often underwriters work in collusion with their associates, the institutional buyers and brokers, to "pre-sell" an offering (The focus of several current SEC investigations). The result can be a sharp and artificial increase in share prices at the launch of the IPO. This rapid increase is generally followed by a rapid decline once the sell-off and profit-taking begin. This profit-taking can result in a crippling devaluation of a new issue. It can also place undue stress on a company during what should be a positive growth period. Using the available alternatives may not be as glamorous or meteoric but it's also not as risk prone as the IPO. Working with your market makers you can establish a practical and supportable value for your stock prior to a major fund raising event, a value that isn't artificially created by heavy upfront demand and short supply.

Control Over Timing

Another aspect of the IPO left to the control of the underwriter is the timing. If they don't feel that the market conditions are favorable to a highly profitable outcome they can and do stop the entire process. The alternative approaches allow you and your team to decide when, where and at what level you'll enter the marketplace. You can structure the process with contingency options or step it out using several phases instead of having to rely on a single event.

Lower Cost To Enter

The up front legal, accounting and marketing costs to prepare an IPO launch are covered by the client. They are lost if your underwriter puts a hold on or withdraws from the IPO. The fund-raising event, what was supposed to be a positive financial event, can turn into a drain on precious resources. There are legal, accounting and marketing costs associated with the alternative approaches too. But, they are generally less than half the cost of doing an IPO and how they are incurred is under your control.

What Is Reverse Merger?

The term reverse merger refers to an alternative strategy by which a private company seeks and acquires public listing and becomes a publicly traded company. In a reverse merger, a private company merges with a public company and continues as the dominant successor entity. Optimally, the public entity has no assets, liabilities or operations prior to, or concurrent with the merger. Public companies actively seeking such mergers are sometimes referred to as blank check companies or public shells, given the fact that ideally only their corporate structures and status as publicly listed entities and fully reporting issuers are the dominant features of interest in such a merger. By merging into a shell, a private company becomes public in an expeditious and cost-effective manner.

The private company merges into a public company and obtains the majority of its stock (generally ranging from 80-95%) Once the merger is consummated, the post-merger, combined entity changes its name to that of the private company, appointing and electing key officers and directors and the discretion of the private company.

The advantages of public trading status notably include the possibility of a greater likelihood of capital formation. Relative to a private enterprise, a public company is potentially more successful in attracting potential investors and investment banking firms for the purposes of raising additional funds. Going public through a reverse merger allows a private company to go public rather relatively quickly, at a substantially lesser cost and with less resultant dilution than traditional initial public offering (IPO) or direct public offering (DPO) strategies. While the process of going public securing fully reporting status and raising capital is combined in an IPO, in a reverse merger these two functions are unbundled; secures public listing first then seeks additional capital formation Via this unbundling operation, the process of going public is significantly simplified. The advantages of public listing or going public include:

Increased liquidity of the ownership shares of the company;

Higher share price and thus higher company valuation;

Greater access to the capital markets through the possibility of a future stock offering;

The ability of the company to make acquisitions of other companies using the company's stock;

The ability to use stock incentive plans to attract and retain key employees;

Going public can be part of a retirement strategy for business owners.

The benefits of going public through a reverse merger, as opposed to the traditional IPO process, include the following:

The costs are significantly less than the costs required for an initial public offering;

The time frame requisite to securing public listing is considerably less than that for an IPO;

Additional risk is involved in an IPO in that the IPO may be withdrawn due to an unstable market condition even after most of the up-front-costs have been expended;

Traditional IPOs generally require greater attention from senior management;

While an IPO requires a relatively long and stable earnings history, the lack of an earnings history does not normally keep a privately-held company from completing a reverse merger;

There is less dilution of ownership control;

No underwriter is needed: (a significant factor to consider given the difficulty companies face in attracting an investment banking firm to commit to an offering);

Typically publicly traded companies enjoy substantially higher valuations.

Why Use Reverse Merger To Raise Money

The first question that must be answered prior to obtaining funds from another party is: Why do you need the money? There are many reasons why companies seek outside financing. This section covers the most common.

Growth Financing

The most common use of financing is to fund a company's growth. Many companies reach a point in their growth at which they need outside financing to expand to meet their potential. In this case, we assume that the current owners of the business are not seeking to liquidate some or all of their stake in the business, but rather are looking for financing to augment the cash flow of the company during a period of anticipated rapid growth. This growth can result from an expansion of the company's physical plant or through sales growth that requires additional working capital. The three most common reasons for needing access to growth financing are the following:

Physical Expansion

Physical expansion can be the easiest form of growth for a company to finance through outside sources. The company is normally increasing its asset base and therefore its borrowing capacity. Expansion scenarios can be located on a spectrum. At one end of the spectrum is the project in which all of the costs are associated with the purchase of fixed assets. The most obvious example is the purchase of a new vehicle used in the core business of the company. These projects are good candidates for low-cost financing -- asset-backed senior debt being but one possibility. The rise of lease financing as a tool for businesses provides another low-cost, off-balance-sheet source of capital that in certain situations may enable the company to finance 100% of the cost of the asset. Even if lease financing is not available, the company may be able to use some of its own excess borrowing capacity to collateralize that portion of the debt in excess of the amount a lender is willing to advance.

At the other end of this spectrum are projects in which a substantial portion of proceeds will be spent on soft costs, generating little in the way of fixed assets to collateralize the loan. If the company has little or no debt on its books, it may be able to use its borrowing base to fund the soft costs. If the company has borrowed against those assets for its own purposes and additional asset based loans are unavailable, the companies must turn to junior capital - equity or subordinated debt or both - to fill the gap.

Somewhere in the middle lie those situations in which the collateral values are too low to secure asset-backed financing for the entire transaction but in which the historic cash flows of the business are sufficient, or the likelihood that the expansion effort will succeed are so great, that a senior lender will make what is termed a cash flow loan. This loan, often structured with accelerated amortization and a cash flow sweep provision, is also referred to as an "air ball". The lender holds his or her breath for the period of time this loan is outstanding, hoping that those cash flows hold up and the loan is repaid. Cash flow loans are always more expensive than asset-backed, or secured loans, and are generally available from larger, more sophisticated banks and financial institutions.

Working Capital For Growth

In some situations, a company can grow without purchasing additional assets or expanding its physical plant. Often, this growth requires additional working capital to finance inventory purchases and accounts receivable that may grow faster than payables, putting the company in a tight cash position. Provided this growth follows historic patterns and is built on business relationships with customers roughly similar to the company's current customer base, an existing revolving line of credit can generally be expanded to accommodate the new credit needs of the business.

In situations where the company is branching out into uncharted territory, or is contemplating growth that does not necessarily create a larger current asset base against which to borrow, the company may find itself in need of subordinated debt or equity. In those situations, the analysis the company will be subject to is identical to situations where they require subordinated debt and equity financing. The risks of the business as it is and the risks that the growth efforts will fail are weighed by a lender or investor relying on continued cash flows and equity growth to realize an appropriate return.

Refinancing To Replace Restrictive Lenders

There are situations when a company is poised for growth and is held back by a reluctant financial partner, most often but not exclusively a conservative bank unwilling to bear the risks of growth. Banks are often in the position of curbing growth if only because they generally do not price their loans to account for the risks associated with change. In some cases the company will require both additional senior debt from the institution in question as well as junior capital which will complicate the company's balance sheet and introduce a new party into the lending relationship, the bank may elect to exit the loan.

The most important insight an entrepreneur can take into a refinancing situation is that the same amount of senior debt can look very different depending on the other elements of the balance sheet, even without any changes in the company's base business.

Acquisition Financing

The opportunity to complete a strategic acquisition is one of the best ways to enhance the value of a company, since an acquisition may enable you to leap frog competitors, open new markets, develop new product lines, etc. However, a poorly executed acquisition can weaken a company's balance sheet and distract key management without providing the anticipated value.

All acquisitions have unique characteristics and, therefore, unique financing requirements. Much depends on the company being acquired (the "target") and the Acquirer's strategy. We have highlighted below the three basic types of financing and their respective pros and cons. Depending on the financial health of both the target and the acquirer, the financial structure can be any combination of (I) debt, (II) equity and (III) the acquirer's stock. Three primary issues to address when structuring the acquisition are:

The amount of debt which should be raised.

Creating a capital structure that is appropriate for the combined Company's future.

The cost of funds.

Debt Financing

Debt is the cheapest method of financing an acquisition bid and can take many forms. The amount of debt that can finance an acquisition depends on the projected cash flows of the combined company. This will depend on the financial health of both the target and the acquirer.

If your company is interested in a leveraged buyout, it may be able to finance all or most of the purchase price with debt. Under this structure, the assets and cash flows of the Target collateralize the debt. This transaction is very similar to a home mortgage, in which the underlying asset backs the loan.

Banks usually provide the cheapest and most common form of debt: senior debt. However, there are many other providers of senior debt who employ different methodologies for structuring loans. Subordinated debt lenders are more aggressive in the amount of debt they provide. Accordingly, these lenders charge higher interest rates and often require a piece of the equity of the combined company.

While debt is cheaper than equity, the interest and amortization requirements as well as possible financial covenants can limit a company's flexibility. Large amounts of debt are more appropriate for mature companies with stable cash flows which will not require much capital for growth. Companies that foresee rapid growth, require substantial capital expenditures and compete in turbulent markets are often better off financing acquisitions with more equity than debt.

Equity Financing

Equity is a more expensive form of capital than debt. This is because it carries the most risk since it has no claim to the company's assets. Acquisitions that have unstable cash flows require capital for growth and compete in turbulent industries often require a greater amount of equity. Equity provides more financial flexibility because it does not require scheduled payments.

Financing an acquisition with equity requires relinquishing some amount of ownership in the combined company. The equity investors will often assume some amount of representation on the Board of Directors. Equity investors can take the form of leveraged buyout funds, venture capital funds or corporations.

Stock Swaps

It is also possible to use the acquirer's stock to purchase all or some of the shares of the target. This is very common among companies whose stock is publicly traded. A stock swap is more difficult in private transactions because the acquiring stock is illiquid (i.e., cannot be quickly sold). However, if the owner of the target would like to retain some stake in the combined company, then exchanging shares is a sensible solution.

In order to complete a stock swap, a value must be placed on the equity of both companies and a share price must be determined. The investment banker on the acquisition team will be able to provide guidance in valuing both companies. There is a range of methods for valuing a private company, including:

Comparable Valuation Analysis Public versus Private

Transaction Valuation Analysis

Discounted Cash Flow Valuation Analysis

Leveraged Buyout Analysis

A stock swap is a valuable tool for retaining the involvement and expertise of the target's owner, if that is desired. If the owner is active in managing the target's operations and his or her expertise is important to the success of the combined operation, offering stock in the combined company will insure that the interests of the two parties are aligned.

A stock swap often funds some portion of the purchase price in roll-up strategy acquisitions. Financing a roll-up strategy usually requires an initial equity investment in the by the acquirer to position it for rapid growth. Subsequent acquisitions are then financed largely with debt. However, stock in the combined companies is not only an important currency to fund the purchase price, but also to retain the involvement of the management/owners of the Target.

Turnarounds

Turnaround financing involves providing capital to companies that are performing poorly but that are expected to turn around and perform much better in the future. Often this kind of financing occurs in the context of a transaction or purchase of the company by a new owner and often a new management team is hired at the same time. Turnaround financing can include senior debt, subordinated debt and equity.

There are very few sources of turnaround financing. Turnarounds involve companies that for one reason or another (or a combination of reasons, more often) have fallen on hard times. Someone sees value in the business beyond what is obvious from the current and recent performance and takes on the challenge of turning the business around. These opportunities are fraught with risk - typically, if the company continues on its present course, it will not be able to remain a going concern; this is all the more true if the transaction that starts the turnaround involves debt financing. Against that backdrop - that the current state of affairs will lead to disaster - are the twin challenges of (a) accurately diagnosing what is wrong with the business and (b) quickly developing and implementing a turnaround plan that addresses those problems.

Management Buyouts

Managers often team up with private equity investors to purchase businesses or subsidiaries, divisions or product lines of corporations, using a combination of debt and equity financing. This is one of the most powerful methods for enriching the entrepreneurial spirit of professional managers.

Management buyouts represent the opportunity of a lifetime. After playing a critical role in building their company, managers often consider buying their company as the natural next step in the progression of the company's ownership. For most managers, a company buyout is the fulfillment of their dreams. However, successfully pursuing and implementing a management buyout is one of the most difficult jobs a manager will ever tackle.

Managers are experts at running their companies, but most managers have little experience making an acquisition. Management buyouts generally occur in a short time frame and require substantial and multiple sources of capital as well as legal, accounting, environmental and other professional support.

Employee Buyouts

Employee buyouts are one of the most fascinating developments in the world of corporate finance. They had their beginnings in the early 1970s after Employee Stock Ownership Plan (ESOP) regulations were codified in the law as part of the ERISA legislation in 1974. An Employee buyout involves owners of a company selling a majority of their stock to its employees through an ESOP structured corporate transaction.

Employee buyouts can turn around failing companies, increase the cash flows of good companies, motivate employees to outperform their competition, reduce or eliminate corporate taxes for years, and provide a tax-advantaged investment for employees. In the highest of capitalist traditions, employee buyouts can also transfer wealth in a free market transaction to the employees who have spent their careers building the company.

Esop Financing

Countless studies have shown that employee ownership motivates employees to improve their productivity, the quality of their work and the competitiveness of their company. ESOP financing provides a whole series of benefits to the owners of a company, to the company itself and to the employees.

Leveraged ESOP financing can allow an owner to sell all or a portion of his or her stock to the employees and indefinitely defer capital gains taxes. This has the added impact of reducing the company's taxes while it provides employees with tax sheltered ownership of the company's stock.

Internet Financing

Every company that deploys a product or service through a large and expensive distribution system will be confronted over the next ten years with a major distribution dilemma. Should the company continue to market through its existing distribution system or should it dramatically reduce costs by turning instead to the Internet to distribute and market its product or service? A direct market distribution strategy will require significant investment in expertise, structures and systems that many executives today cannot fathom. Additional funding may be required to make the business transition.

Re-capitalizations

There are many situations in which a company may need to be re-capitalized. As the word implies, a re-capitalization involves an infusion of capital and, potentially, certain parties taking money out of the company. This occurs when a shareholder sells his or her stake in the company or when existing debt providers are being replaced. In any re-capitalization, the company must perform many of the same tasks, as it would have in an acquisition or buyout.

Rollups

A rollup is a strategy of buying several companies at once, or in rapid succession, in one industry to gain a variety of corporate benefits, such as economies of scale, broader product line, cheaper financing, greater diversity of customer base, etc. Rollups are very complicated transactions that should be implemented by a highly experienced team of professionals. Experienced sources of capital are critical to implement a rollup on the timetable necessary to achieve success. However, rollups can be considered to consist of a number of the above discussed transactions (or combinations thereof) executed within a narrow time horizon.

What Are The Benefits In Being Public?

Many entrepreneurs have found going public to be incredibly rewarding - for their companies and for themselves. Why are private companies interested in going public?

To raise capital quickly and more easily;

To form mergers;

To acquire other companies;

To gain more media attention;

To enhance their corporate image;

To provide their shareholders with liquidity;

To facilitate corporate borrowing from banks;

To provide employee stock option benefits and compensation;

To create wealth for the founders and original investors.

Why do founders of private companies want to take their company public?

To create significant wealth for themselves

To obtain loans from financial institutions using their stock as collateral

To increase the liquidity of the shares they own

To gain prestige and respect in their community

To improve access and raise capital from the public

To grow their business through mergers and acquisitions

To reduce the need for venture capital and bank financing

Does My Company Qualify To Become Public?

Absolutely. There is no minimum level of sales, profits or assets that your company needs to become publicly traded on the NASDAQ Over-the-Counter Bulletin Board (OTCBB). There are listing requirements for all other exchanges. Your company can go public through a reverse merger if you are a well-established business, a start-up or still in the development stage.

However, reverse mergers are appropriate for companies that do not need capital quickly and that will experience enough growth to reach a size and scale at which they can succeed as a public entity.

Reverse mergers can be best used to finance anything from product development to working capital needs. However, they work best for companies that do not need capital quickly. Not that reverse mergers take long to consummate, but the initial transaction is usually just the halfway point. Once public, a company generally must still find capital. Also, this financing technique works better for companies that will experience substantial enough growth to develop into a "real" public company.

What Is The Otc Bulletin Board?

The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. OTCBB securities include national, regional, and foreign equity issues, warrants, units, American Depositary Receipts and Direct Participation Programs.

The OTCBB is a quotation medium for subscribing members, not an issuer listing service, and should not be confused with The NASDAQ Stock Market. There are no minimum quantitative standards, which must be met by an issuer for its securities to be quoted on the OTCBB; however, the new eligibility rules limits quotations on the OTCBB to the securities of issuers that are current in their reports filed with the SEC and other regulatory authorities. Issuers do not have any filing or reporting requirements with The NASDAQ Stock Market, Inc., or the NASD. Market Makers will be required to provide the periodic financial reports filed by OTCBB issuers with the SEC or other regulatory authorities pursuant to the eligibility rule.

NASDAQ has no business relationship with the issuers of securities quoted on the OTCBB. Investors must contact a broker/dealer to trade OTCBB securities. Investors do not have direct access to the OTCBB service. The Securities and Exchange Commission's (SEC's) Order-Handling Rules which apply to NASDAQ-listed securities do not apply to OTCBB securities. Quarterly and Annual financial information, as well as other company information is filed with the SEC by all OTCBB issuers. OTCBB issuers information can be viewed at the SEC's website at www.sec.gov

What Is The Otc Market?

OTC, or "Over The Counter," securities are issued by companies that either choose not to, or are unable to, meet the standards for listing on the NASDAQ or a stock exchange. OTC equity securities can be quoted on the Pink Sheets Electronic Quotation Service, or, if the companies are SEC reporting, on the NASD OTC Bulletin Board Service.

The OTC market presents investment opportunities for intelligent, informed investors, but also has a high degree of risk. Many OTC issuers are small companies with limited operating histories or are economically distressed.

What Is Rule 15c2-11?

SEC Rule 15c2-11 was designed to allow non-reporting public company's securities to be quoted on the National Association of Securities Dealers' ("NASD") Over-the-Counter Bulletin Board ("OTCBB") by filing some simple disclosures.

Now, companies seeking to obtain a quote on the NASD OTCBB must be required to file reports with the Securities and Exchange Commission ("SEC"). Under Section 15 of the Securities Exchange Act of 1934 (the "Act"), as amended, a company who has filed a registered offering with the SEC, such as an SB-1 or SB-2 registration statement is required to file reports for one year. A company which files a Form 10 or Form 10SB (for small business issuers) becomes a reporting company under Section 12g of the Act and must file reports. To be eligible for a quotation of its securities, the company's market maker must file a Form 211 with the NASD, the company must have sufficient free trading stock in its public float to allow Rule 15c2-11.

The stated and un-stated listing requirements for the NASD OTC-BB are as follows:

fully reporting with the U.S. Securities and Exchange Commission,

minimum of 40 stockholders of record holding at least 100 shares each (note: this number is informal and has been moving up),

must have a market maker submit 15c2-11 (Form 211) application to NASD and agree to act as market maker for securities of company.

If you need assistance in having a Form 211 filed with the NASD so that your company can trade on the OTCBB, we can help prepare that paperwork and introduce you to a market maker.

Why Incorporate Or Form An Llc ( Limited Liability Company ) With Coddan?

E-mail Us info@ukincorp.co.uk Request a Call Back Call Us (UK): 44 (0) 207.935.5171 / 0330.808.0089

WHY FORM DELAWARE CORPORATIONS? INCORPORATORS; HOW CORPORATION FORMED; PURPOSES

Any person, partnership, association or corporation, singly or jointly with others, and without regard to such person's or entity's residence, domicile or state of incorporation, may incorporate or organize a corporation under this chapter by filing with the Division of Corporations in the Department of State a certificate of incorporation which shall be executed, acknowledged and filed in accordance with § 103 of this title. A corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes, except as may otherwise be provided by the Constitution or other law of this State. If the persons who are to serve as directors until the first annual meeting of stockholders have not been named in the certificate of incorporation, the incorporator or incorporators, until the directors are elected, shall manage the affairs of the corporation and may do whatever is necessary and proper to perfect the organization of the corporation, including the adoption of the original bylaws of the corporation and the election of directors. If you are selling goods or services, you need to consider forming a corporation or limited liability company for your business activities. One of the easiest ways to do this is to enlist the help of the Delaware company that probably does more of this work than any other company. Coddan can form corporations or register limited liability companies for you in any of the 50 States; it can also qualify your company to do business in any State or file an alternate company name (trade name). We have designed our web site so that you can order online a Delaware corporation or limited liability company. In most cases, we will have your organizational certificates filed with the Delaware Secretary of State by the next business day after we receive your order. If you want to become familiar with the description and the contents of Delaware company formation packages, offered by Coddan and to find above, what kind of service is included in this or that Delaware companies incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company registration within State of Delaware, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.

Why form Delaware Corporations? The main reasons for Incorporating in Delaware are as follows:

Creating a separate legal entity for personal protection

Building corporate credit

Separate liability for corporate debts

A broad range of powers beyond that of a sole proprietorship

Anonymity

Tax Savings

Law Suit Protection

Small claims court benefits

Perpetual duration

Creditability

Deductible employee benefits

The ease of raising capital

When a sole proprietorship or partnership is sued you risk losing your personal assets. When you incorporate in Delaware a separate legal person is created, protecting personal assets. As a shareholder, officer and/or director it is possible to have control over Delaware corporations.

Thousands of businesses have been right where you are now - deciding to incorporate and deciding to use Coddan. We provide a user-friendly service for you to incorporate online today in one easy step. Protect your business and personal assets, share in the fringe benefits of a corporation, and lower your tax bill along the way. You’re moving forward with your business, Coddan can help. Known as the Diamond State, Delaware is the home to more than half of the Fortune 500 corporations, and many small business owners around the globe have also incorporated in Delaware for a number of reasons. Delaware is also know as the First State because it was the first state to ratify the Constitution of the United States. As the second smallest state in the country, Delaware has always had to work smarter, and its home page shows some of that smart work. It is an interesting looking, and well organized page that makes it very easy to find information about all that Delaware has to offer.

Incorporation by Coddan: Incorporating Plans at Affordable Prices in all USA, EU and UK Delaware Corporations and LLCs Registration Packages & Costs | (Price Includes Standard State Filing Fees!)

We specialize in the forming, maintaining and utilization of Delaware corporations and Delaware Limited Liability Companies for people and businesses worldwide. We register corporations and LLC's in 50 states for U.S. & international clients. Whether you want a full office with nominee officers or just resident agent service we are here to help you through every step that your business may take. At Coddan we assist clients with the first step of incorporate a company, we can assist you establishing your business with minimal effort and time. We provide our clients with full expert assistance throughout every step of the formation process, however our service does not stop there. We will give you any assistance or advice related to company formation matters from the moment you choose to incorporate with us and for as long after incorporation as you may require. An addition to our service is the continuous online support for all our clients via the Internet (LiveChat), Telephone and Email. Clients may even register for their companies with us online, a quicker and more accurate procedure for launching your company. If you have any questions please E-Mail or call us: 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531.

How to Incorporate a Corporation or Form an LLC Online You May Use This Link to Register a Corporation or Form an LLC |

Incorporating in Delaware or registering a company in Nevada has the greatest tax benefits to you and your company. By forming a Delaware corporation you can begin to live the corporate lifestyle with unparalleled tax savings, asset protection, and privacy. When you incorporate a business you begin to unlock many options for yourself and your business. The proper incorporation of your company and record keeping provides a corporate veil that will keep you and your business safe from lawsuits, tax troubles, and even prosecution. By filling your SS-4 forms, and receiving your corporations (or LLCs) EIN number, you are no longer taxed individually but as a corporation. Let Coddan' experienced tax consultants optimize your tax position today!

Coddan offers online Delaware, Nevada, California and Florida business incorporation services. At Coddan we assist clients with this step of business incorporation by reviewing the goals and individual facts of each situation to recommend the best entity - selecting from limited or general partnerships, limited liability companies (LLC) and corporations, and the different elections or options available under each. Key to your Delaware incorporation is your research and review of the various forms of incorporation options and how each business registration structure differs in form, purpose and regulatory requirements. Your Delaware incorporation options include for profit corporate structures such as the standard C Corporation or the related Subchapter S Corporation, or for special purpose entities the non-profit incorporation, or the somewhat new and highly flexible Limited Liability Company or LLC formation option. Equally true, Delaware registration to an overseas person or firm would potentially be a practical move when considering offshore registration in the widest international context of competing jurisdictions. We offer a quick, simple, and inexpensive way for anyone to incorporate or forming an LLC online. We hope that this site will help us towards achieving this aim and we would welcome any feedback which you may have. We offer a choice of companies incorporation packages to suit your practice requirements. We do not cut costs on expertise and quality but still maintain a cost effective pricing structure. Many agents say they provide these items but will only actually complete them at an extra cost. All you need to do is fill out our online order form, and we'll take care of the rest.

Delaware LLC Formation Package - £100.00! Delaware LLC Formation Packages & Costs Place Your Order Online | (Price Includes Standard State Filing Fee)

The time the state requires to approve and return your completed Articles of Incorporation varies by state. On average, it takes 4-6 weeks to become incorporated. Most states will allow you to expedite the filing process for an additional charge; expediting filings typically take about few days. Those charges also vary by state. Our services include preparation and filing of the following types of documents:

Name Clearance, Reservation and Registration

Incorporation (or Formation)

Qualification (or Registration)

Amendments and Restatements

Limited Liability Company Formation and Amendment

Limited Partnership Formation, Amendment and Termination

Mergers

Annual Reports

Dissolution, Cancellation and Withdrawal

Incorporate in UK Why Incorporate in Delaware State of Delaware Advantages

Delaware Corporation with Resident Agent and Registered Address from only £174.00! All our Delaware corporations are general trading companies which include search name availability for your Delaware Corporation. Preparation and filing of Certificate of Incorporation with state office. Our incorporation service and State filing fees. Certified Copy of the Certificate of Incorporation. Delaware Resident Agent for 12 months. Registered Address in the State of Delaware for 12 months.

Delivery Certified Copy of the Certificate of Incorporation is delivered as hard copy by post.

The following documents will be delivered via E-Mail: a professionally-prepared 20 page Delaware Corporation By-laws ready-for-signature (Word. format). Minutes or Consents Documentation of Organizational Meeting.

It will take just 5 minutes to complete the online incorporation form and you might get the company set up within 24-48 hours.

THE FOLLOWING UPGRADES CAN BE ADDED TO THE ABOVE PACKAGE:

1. Nominee Director service for 12 months - £140.00

2. Nominee Shareholder service for 12 months - £94.00

3. Non-Standard Certificate of Incorporation (4-5 pages) - £60.00

4. Employer Identification Number (EIN) - £40.00

5. Domain Name Registration (.com or .us) for two years - £30.00

6. 888, 877, or 866 toll-free telephone numbers - £50.00

7. Apostilled Certificate of Good Standing - £125.00

8. Apostilled Certificate of Incorporation - £110.00

9. Corporate Kit (seal is included) - £38.00

 

Monday - Friday: 9:30am to 17:30pm

United Kingdom Contact +44 (0) 207.935.5171

United Kingdom Contact +44 (0) 800.081.1510

Northern Ireland Contact +44 (0) 289.099.8744

E-Mail Contactinfo@ukincorp.co.uk

Assumed Business Name

Mail Forwarding Service

Obtain Employer Identification Number – EIN Application Form

Preparation of Subchapter S Election Application

Registered Office & Registered Agent Services

Payroll and Tax Services

Notary & Apostille Legalization Services

REVERSE MERGERS / SHELL COMPANIES. GOING PUBLIC WITHOUT THE COST OF AN IPO!

Many successful private companies are ready to make the transition to the next level by going public. But for some reason they may not be in a position to complete the process of going public through an Initial Public Offering (I.P.O.). Some companies may not need the money from an IPO but still desire to go public. Other companies may not be able to produce the historical financial statements needed to complete the filing requirements. Or there may be some other reason for wanting to go public without completing an IPO. The alternative method of going public is to merge with a company that is already public.

There are many companies that are already public but do not have any operations. The private company that merges with one of these companies would be completing what is know as a reverse merger. In a reverse merger the private company's operations would continue and legally the public company would continue. The net effect is that the private company is now public.

There are hundreds of public shell companies available for reverse mergers. Some are actively traded and some are not. The cost of these companies can vary greatly. You can find one by contacting the usual suspects. As a first stop, ask an attorney. Every metropolitan area has a law firm with a securities practice. Often, these firms have a dormant public company sitting on one of the partners' bookshelves.

Another alternative is an accountant. People who control shell companies tend to keep the financial statements; such as they are, up to date. This brings accountants into the loop. Like attorneys, they know where the bodies are.

Another source is financing consultants. In fact, many actually have a couple of clean public shell corporations formed for the purpose of taking companies public through a reverse merger. These made-to-order (blank checks) shells come without the baggage of business failures in their background can sometimes be the way to go.

But there's often a cost involved. That is, you will most likely end up with the financing consultants as minority shareholders in the new company, holding between 2 percent and 5 percent. However, in almost any reverse merger transaction, the principals of the shell company keep a small equity position in the company going forward. Therefore, this surrender of equity is simply a cost of doing business.

YOUR COMPANY CAN GO PUBLIC ON THE OVER-THE-COUNTER UKINCORP IN 30 DAYS BY MERGING WITH A NON-REPORTING SHELL COMPANY!

We have shell companies established for the purpose of acquiring or merging with operating companies that wishes to go public in the USA on the over-the-counter UKINCORP. These non-reporting shells are clean, have never conducted any operations since inception, and are ready for restructuring, according to a buyer’s specific needs.

Name change through the State of Delaware, stock symbol and Cusip # issued by Cusip Service Bureau and NASDAQ Market Equities;

15c2-11 information & disclosure statement prepared and filed through the UKINCORP;

Restructuring according to buyer’s needs – 95% + deliverable; Public float created by a specific type of private securities offering in a state where there is an available exemption from registration requirement for issuance of shares of up to US$1 million to accredited investors only.

All legal fees for restructuring the shell through a reverse merger is included in the purchase price of £100,000, with flexible payment terms.

To begin the due diligence process, the seller requires a deposit of £25,000 and the balance payable when the company is public and trading on the over-the-counter UKINCORP. The buyer will have a new board of directors; a new stock symbol quoted with market makers, and will be fully trading as a public company.

GO PUBLIC TODAY BY REVERSE MERGER

Too much has been written about the process of taking a company public and the benefits of active participation in the global equities market. Almost all of this information focuses on the "traditional" IPO (Initial Public Offering) and working with an underwriter. This is the world of big money with all its associated glitz and hype. The IPO is regularly touted as "the right way" to take a company public, anything else is suspect. Over the years we've found that what makes an alternative approach suspect is directly related to the experience of the group that's pitching you their services.

Keep in mind that when you contract with a consulting group or underwriter to conduct an IPO you essentially turn over control of the process, and the future of your company, to a group of outsiders whose prime goal is to make as much money off your deal as they possibly can.

There are a variety of alternative methods to the IPO that can be used alone or in combinations. Each of them will provide you with:

Access to the public financial markets; and

Create an exit strategy for you and your investors.

These are generally the two main objectives for any company looking to go public. Three key benefits to using the alternative approach.

CONTROL OVER VALUE

Often underwriters work in collusion with their associates, the institutional buyers and brokers, to "pre-sell" an offering (The focus of several current SEC investigations). The result can be a sharp and artificial increase in share prices at the launch of the IPO. This rapid increase is generally followed by a rapid decline once the sell-off and profit-taking begin. This profit-taking can result in a crippling devaluation of a new issue. It can also place undue stress on a company during what should be a positive growth period. Using the available alternatives may not be as glamorous or meteoric but it's also not as risk prone as the IPO. Working with your market makers you can establish a practical and supportable value for your stock prior to a major fund raising event, a value that isn't artificially created by heavy upfront demand and short supply.

CONTROL OVER TIMING

1. Delaware is considered the most attractive state in the nation for organizing.

2. Delaware courts have a reputation of reaching reasonable and fair conclusions when construing the corporation laws.

3. Only one incorporator is required. A corporation may be the incorporator.

4. There is no minimum capital requirement.

5. The franchise tax compares favorably with that of other states.

6. For companies doing business outside of Delaware, there is no corporation income tax.

7. Delaware has no sales tax, personal property tax or intangible property tax on corporations.

8. No taxation upon shares of stock held by non-residents and no inheritance tax upon non-resident holders.

9. A corporation may keep all of its books and records outside of Delaware.

10. You may have a principal place of business/address outside of the State of Delaware as well.

 

Another aspect of the IPO left to the control of the underwriter is the timing. If they don't feel that the market conditions are favorable to a highly profitable outcome they can and do stop the entire process. The alternative approaches allow you and your team to decide when, where and at what level you'll enter the marketplace. You can structure the process with contingency options or step it out using several phases instead of having to rely on a single event.

LOWER COST TO ENTER

The up front legal, accounting and marketing costs to prepare an IPO launch are covered by the client. They are lost if your underwriter puts a hold on or withdraws from the IPO. The fund-raising event, what was supposed to be a positive financial event, can turn into a drain on precious resources. There are legal, accounting and marketing costs associated with the alternative approaches too. But, they are generally less than half the cost of doing an IPO and how they are incurred is under your control.

WHAT IS REVERSE MERGER?

The term reverse merger refers to an alternative strategy by which a private company seeks and acquires public listing and becomes a publicly traded company. In a reverse merger, a private company merges with a public company and continues as the dominant successor entity. Optimally, the public entity has no assets, liabilities or operations prior to, or concurrent with the merger. Public companies actively seeking such mergers are sometimes referred to as blank check companies or public shells, given the fact that ideally only their corporate structures and status as publicly listed entities and fully reporting issuers are the dominant features of interest in such a merger. By merging into a shell, a private company becomes public in an expeditious and cost-effective manner.

The private company merges into a public company and obtains the majority of its stock (generally ranging from 80-95%) Once the merger is consummated, the post-merger, combined entity changes its name to that of the private company, appointing and electing key officers and directors and the discretion of the private company.

The advantages of public trading status notably include the possibility of a greater likelihood of capital formation. Relative to a private enterprise, a public company is potentially more successful in attracting potential investors and investment banking firms for the purposes of raising additional funds. Going public through a reverse merger allows a private company to go public rather relatively quickly, at a substantially lesser cost and with less resultant dilution than traditional initial public offering (IPO) or direct public offering (DPO) strategies. While the process of going public securing fully reporting status and raising capital is combined in an IPO, in a reverse merger these two functions are unbundled; secures public listing first then seeks additional capital formation Via this unbundling operation, the process of going public is significantly simplified. The advantages of public listing or going public include:

Increased liquidity of the ownership shares of the company;

Higher share price and thus higher company valuation;

Greater access to the capital markets through the possibility of a future stock offering;

The ability of the company to make acquisitions of other companies using the company's stock;

The ability to use stock incentive plans to attract and retain key employees;

Going public can be part of a retirement strategy for business owners.

The benefits of going public through a reverse merger, as opposed to the traditional IPO process, include the following:

The costs are significantly less than the costs required for an initial public offering;

The time frame requisite to securing public listing is considerably less than that for an IPO;

Additional risk is involved in an IPO in that the IPO may be withdrawn due to an unstable market condition even after most of the up-front-costs have been expended;

Traditional IPOs generally require greater attention from senior management;

While an IPO requires a relatively long and stable earnings history, the lack of an earnings history does not normally keep a privately-held company from completing a reverse merger;

There is less dilution of ownership control;

No underwriter is needed: (a significant factor to consider given the difficulty companies face in attracting an investment banking firm to commit to an offering);

Typically publicly traded companies enjoy substantially higher valuations.

WHY USE REVERSE MERGER TO RAISE MONEY

The first question that must be answered prior to obtaining funds from another party is: Why do you need the money? There are many reasons why companies seek outside financing. This section covers the most common.

GROWTH FINANCING

The most common use of financing is to fund a company's growth. Many companies reach a point in their growth at which they need outside financing to expand to meet their potential. In this case, we assume that the current owners of the business are not seeking to liquidate some or all of their stake in the business, but rather are looking for financing to augment the cash flow of the company during a period of anticipated rapid growth. This growth can result from an expansion of the company's physical plant or through sales growth that requires additional working capital. The three most common reasons for needing access to growth financing are the following:

PHYSICAL EXPANSION

Physical expansion can be the easiest form of growth for a company to finance through outside sources. The company is normally increasing its asset base and therefore its borrowing capacity. Expansion scenarios can be located on a spectrum. At one end of the spectrum is the project in which all of the costs are associated with the purchase of fixed assets. The most obvious example is the purchase of a new vehicle used in the core business of the company. These projects are good candidates for low-cost financing -- asset-backed senior debt being but one possibility. The rise of lease financing as a tool for businesses provides another low-cost, off-balance-sheet source of capital that in certain situations may enable the company to finance 100% of the cost of the asset. Even if lease financing is not available, the company may be able to use some of its own excess borrowing capacity to collateralize that portion of the debt in excess of the amount a lender is willing to advance.

At the other end of this spectrum are projects in which a substantial portion of proceeds will be spent on soft costs, generating little in the way of fixed assets to collateralize the loan. If the company has little or no debt on its books, it may be able to use its borrowing base to fund the soft costs. If the company has borrowed against those assets for its own purposes and additional asset based loans are unavailable, the companies must turn to junior capital - equity or subordinated debt or both - to fill the gap.

Somewhere in the middle lie those situations in which the collateral values are too low to secure asset-backed financing for the entire transaction but in which the historic cash flows of the business are sufficient, or the likelihood that the expansion effort will succeed are so great, that a senior lender will make what is termed a cash flow loan. This loan, often structured with accelerated amortization and a cash flow sweep provision, is also referred to as an "air ball". The lender holds his or her breath for the period of time this loan is outstanding, hoping that those cash flows hold up and the loan is repaid. Cash flow loans are always more expensive than asset-backed, or secured loans, and are generally available from larger, more sophisticated banks and financial institutions.

WORKING CAPITAL FOR GROWTH

In some situations, a company can grow without purchasing additional assets or expanding its physical plant. Often, this growth requires additional working capital to finance inventory purchases and accounts receivable that may grow faster than payables, putting the company in a tight cash position. Provided this growth follows historic patterns and is built on business relationships with customers roughly similar to the company's current customer base, an existing revolving line of credit can generally be expanded to accommodate the new credit needs of the business.

In situations where the company is branching out into uncharted territory, or is contemplating growth that does not necessarily create a larger current asset base against which to borrow, the company may find itself in need of subordinated debt or equity. In those situations, the analysis the company will be subject to is identical to situations where they require subordinated debt and equity financing. The risks of the business as it is and the risks that the growth efforts will fail are weighed by a lender or investor relying on continued cash flows and equity growth to realize an appropriate return.

REFINANCING TO REPLACE RESTRICTIVE LENDERS

There are situations when a company is poised for growth and is held back by a reluctant financial partner, most often but not exclusively a conservative bank unwilling to bear the risks of growth. Banks are often in the position of curbing growth if only because they generally do not price their loans to account for the risks associated with change. In some cases the company will require both additional senior debt from the institution in question as well as junior capital which will complicate the company's balance sheet and introduce a new party into the lending relationship, the bank may elect to exit the loan.

The most important insight an entrepreneur can take into a refinancing situation is that the same amount of senior debt can look very different depending on the other elements of the balance sheet, even without any changes in the company's base business.

ACQUISITION FINANCING

The opportunity to complete a strategic acquisition is one of the best ways to enhance the value of a company, since an acquisition may enable you to leap frog competitors, open new markets, develop new product lines, etc. However, a poorly executed acquisition can weaken a company's balance sheet and distract key management without providing the anticipated value.

All acquisitions have unique characteristics and, therefore, unique financing requirements. Much depends on the company being acquired (the "target") and the Acquirer's strategy. We have highlighted below the three basic types of financing and their respective pros and cons. Depending on the financial health of both the target and the acquirer, the financial structure can be any combination of (I) debt, (II) equity and (III) the acquirer's stock. Three primary issues to address when structuring the acquisition are:

The amount of debt which should be raised.

Creating a capital structure that is appropriate for the combined Company's future.

The cost of funds.

DEBT FINANCING

Debt is the cheapest method of financing an acquisition bid and can take many forms. The amount of debt that can finance an acquisition depends on the projected cash flows of the combined company. This will depend on the financial health of both the target and the acquirer.

If your company is interested in a leveraged buyout, it may be able to finance all or most of the purchase price with debt. Under this structure, the assets and cash flows of the Target collateralize the debt. This transaction is very similar to a home mortgage, in which the underlying asset backs the loan.

Banks usually provide the cheapest and most common form of debt: senior debt. However, there are many other providers of senior debt who employ different methodologies for structuring loans. Subordinated debt lenders are more aggressive in the amount of debt they provide. Accordingly, these lenders charge higher interest rates and often require a piece of the equity of the combined company.

While debt is cheaper than equity, the interest and amortization requirements as well as possible financial covenants can limit a company's flexibility. Large amounts of debt are more appropriate for mature companies with stable cash flows which will not require much capital for growth. Companies that foresee rapid growth, require substantial capital expenditures and compete in turbulent markets are often better off financing acquisitions with more equity than debt.

EQUITY FINANCING

Equity is a more expensive form of capital than debt. This is because it carries the most risk since it has no claim to the company's assets. Acquisitions that have unstable cash flows require capital for growth and compete in turbulent industries often require a greater amount of equity. Equity provides more financial flexibility because it does not require scheduled payments.

Financing an acquisition with equity requires relinquishing some amount of ownership in the combined company. The equity investors will often assume some amount of representation on the Board of Directors. Equity investors can take the form of leveraged buyout funds, venture capital funds or corporations.

STOCK SWAPS

It is also possible to use the acquirer's stock to purchase all or some of the shares of the target. This is very common among companies whose stock is publicly traded. A stock swap is more difficult in private transactions because the acquiring stock is illiquid (i.e., cannot be quickly sold). However, if the owner of the target would like to retain some stake in the combined company, then exchanging shares is a sensible solution.

In order to complete a stock swap, a value must be placed on the equity of both companies and a share price must be determined. The investment banker on the acquisition team will be able to provide guidance in valuing both companies. There is a range of methods for valuing a private company, including:

  • Comparable Valuation Analysis Public versus Private
  • Transaction Valuation Analysis
  • Discounted Cash Flow Valuation Analysis
  • Leveraged Buyout Analysis

A stock swap is a valuable tool for retaining the involvement and expertise of the target's owner, if that is desired. If the owner is active in managing the target's operations and his or her expertise is important to the success of the combined operation, offering stock in the combined company will insure that the interests of the two parties are aligned.

A stock swap often funds some portion of the purchase price in roll-up strategy acquisitions. Financing a roll-up strategy usually requires an initial equity investment in the by the acquirer to position it for rapid growth. Subsequent acquisitions are then financed largely with debt. However, stock in the combined companies is not only an important currency to fund the purchase price, but also to retain the involvement of the management/owners of the Target.

TURNAROUNDS

Turnaround financing involves providing capital to companies that are performing poorly but that are expected to turn around and perform much better in the future. Often this kind of financing occurs in the context of a transaction or purchase of the company by a new owner and often a new management team is hired at the same time. Turnaround financing can include senior debt, subordinated debt and equity.

There are very few sources of turnaround financing. Turnarounds involve companies that for one reason or another (or a combination of reasons, more often) have fallen on hard times. Someone sees value in the business beyond what is obvious from the current and recent performance and takes on the challenge of turning the business around. These opportunities are fraught with risk - typically, if the company continues on its present course, it will not be able to remain a going concern; this is all the more true if the transaction that starts the turnaround involves debt financing. Against that backdrop - that the current state of affairs will lead to disaster - are the twin challenges of (a) accurately diagnosing what is wrong with the business and (b) quickly developing and implementing a turnaround plan that addresses those problems.

MANAGEMENT BUYOUTS

Managers often team up with private equity investors to purchase businesses or subsidiaries, divisions or product lines of corporations, using a combination of debt and equity financing. This is one of the most powerful methods for enriching the entrepreneurial spirit of professional managers.

Management buyouts represent the opportunity of a lifetime. After playing a critical role in building their company, managers often consider buying their company as the natural next step in the progression of the company's ownership. For most managers, a company buyout is the fulfillment of their dreams. However, successfully pursuing and implementing a management buyout is one of the most difficult jobs a manager will ever tackle.

Managers are experts at running their companies, but most managers have little experience making an acquisition. Management buyouts generally occur in a short time frame and require substantial and multiple sources of capital as well as legal, accounting, environmental and other professional support.

EMPLOYEE BUYOUTS

Employee buyouts are one of the most fascinating developments in the world of corporate finance. They had their beginnings in the early 1970s after Employee Stock Ownership Plan (ESOP) regulations were codified in the law as part of the ERISA legislation in 1974. An Employee buyout involves owners of a company selling a majority of their stock to its employees through an ESOP structured corporate transaction.

Employee buyouts can turn around failing companies, increase the cash flows of good companies, motivate employees to outperform their competition, reduce or eliminate corporate taxes for years, and provide a tax-advantaged investment for employees. In the highest of capitalist traditions, employee buyouts can also transfer wealth in a free market transaction to the employees who have spent their careers building the company.

ESOP FINANCING

Countless studies have shown that employee ownership motivates employees to improve their productivity, the quality of their work and the competitiveness of their company. ESOP financing provides a whole series of benefits to the owners of a company, to the company itself and to the employees.

Leveraged ESOP financing can allow an owner to sell all or a portion of his or her stock to the employees and indefinitely defer capital gains taxes. This has the added impact of reducing the company's taxes while it provides employees with tax sheltered ownership of the company's stock.

INTERNET FINANCING

Every company that deploys a product or service through a large and expensive distribution system will be confronted over the next ten years with a major distribution dilemma. Should the company continue to market through its existing distribution system or should it dramatically reduce costs by turning instead to the Internet to distribute and market its product or service? A direct market distribution strategy will require significant investment in expertise, structures and systems that many executives today cannot fathom. Additional funding may be required to make the business transition.

RE-CAPITALIZATIONS

There are many situations in which a company may need to be re-capitalized. As the word implies, a re-capitalization involves an infusion of capital and, potentially, certain parties taking money out of the company. This occurs when a shareholder sells his or her stake in the company or when existing debt providers are being replaced. In any re-capitalization, the company must perform many of the same tasks, as it would have in an acquisition or buyout.

ROLLUPS

A rollup is a strategy of buying several companies at once, or in rapid succession, in one industry to gain a variety of corporate benefits, such as economies of scale, broader product line, cheaper financing, greater diversity of customer base, etc. Rollups are very complicated transactions that should be implemented by a highly experienced team of professionals. Experienced sources of capital are critical to implement a rollup on the timetable necessary to achieve success. However, rollups can be considered to consist of a number of the above discussed transactions (or combinations thereof) executed within a narrow time horizon

WHAT ARE THE BENEFITS IN BEING PUBLIC?

Many entrepreneurs have found going public to be incredibly rewarding - for their companies and for themselves. Why are private companies interested in going public?

  • To raise capital quickly and more easily;
  • To form mergers;
  • To acquire other companies;
  • To gain more media attention;
  • To enhance their corporate image;
  • To provide their shareholders with liquidity;
  • To facilitate corporate borrowing from banks;
  • To provide employee stock option benefits and compensation;
  • To create wealth for the founders and original investors.

Why do founders of private companies want to take their company public?

  • To create significant wealth for themselves
  • To obtain loans from financial institutions using their stock as collateral
  • To increase the liquidity of the shares they own
  • To gain prestige and respect in their community
  • To improve access and raise capital from the public
  • To grow their business through mergers and acquisitions
  • To reduce the need for venture capital and bank financing

DOES MY COMPANY QUALIFY TO BECOME PUBLIC?

Absolutely. There is no minimum level of sales, profits or assets that your company needs to become publicly traded on the NASDAQ Over-the-Counter Bulletin Board (OTCBB). There are listing requirements for all other exchanges. Your company can go public through a reverse merger if you are a well-established business, a start-up or still in the development stage.

However, reverse mergers are appropriate for companies that do not need capital quickly and that will experience enough growth to reach a size and scale at which they can succeed as a public entity.

Reverse mergers can be best used to finance anything from product development to working capital needs. However, they work best for companies that do not need capital quickly. Not that reverse mergers take long to consummate, but the initial transaction is usually just the halfway point. Once public, a company generally must still find capital. Also, this financing technique works better for companies that will experience substantial enough growth to develop into a "real" public company.

WHAT IS THE OTC BULLETIN BOARD?

The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. OTCBB securities include national, regional, and foreign equity issues, warrants, units, American Depositary Receipts and Direct Participation Programs.

The OTCBB is a quotation medium for subscribing members, not an issuer listing service, and should not be confused with The NASDAQ Stock Market. There are no minimum quantitative standards, which must be met by an issuer for its securities to be quoted on the OTCBB; however, the new eligibility rules limits quotations on the OTCBB to the securities of issuers that are current in their reports filed with the SEC and other regulatory authorities. Issuers do not have any filing or reporting requirements with The NASDAQ Stock Market, Inc., or the NASD. Market Makers will be required to provide the periodic financial reports filed by OTCBB issuers with the SEC or other regulatory authorities pursuant to the eligibility rule.

NASDAQ has no business relationship with the issuers of securities quoted on the OTCBB. Investors must contact a broker/dealer to trade OTCBB securities. Investors do not have direct access to the OTCBB service. The Securities and Exchange Commission's (SEC's) Order-Handling Rules which apply to NASDAQ-listed securities do not apply to OTCBB securities. Quarterly and Annual financial information, as well as other company information is filed with the SEC by all OTCBB issuers. OTCBB issuers information can be viewed at the SEC's website at www.sec.gov

WHAT IS THE OTC MARKET?

OTC, or "Over The Counter," securities are issued by companies that either choose not to, or are unable to, meet the standards for listing on the NASDAQ or a stock exchange. OTC equity securities can be quoted on the Pink Sheets Electronic Quotation Service, or, if the companies are SEC reporting, on the NASD OTC Bulletin Board Service.

The OTC market presents investment opportunities for intelligent, informed investors, but also has a high degree of risk. Many OTC issuers are small companies with limited operating histories or are economically distressed.

WHAT IS RULE 15C2-11?

SEC Rule 15c2-11 was designed to allow non-reporting public company's securities to be quoted on the National Association of Securities Dealers' ("NASD") Over-the-Counter Bulletin Board ("OTCBB") by filing some simple disclosures.

Now, companies seeking to obtain a quote on the NASD OTCBB must be required to file reports with the Securities and Exchange Commission ("SEC"). Under Section 15 of the Securities Exchange Act of 1934 (the "Act"), as amended, a company who has filed a registered offering with the SEC, such as an SB-1 or SB-2 registration statement is required to file reports for one year. A company which files a Form 10 or Form 10SB (for small business issuers) becomes a reporting company under Section 12g of the Act and must file reports. To be eligible for a quotation of its securities, the company's market maker must file a Form 211 with the NASD, the company must have sufficient free trading stock in its public float to allow Rule 15c2-11.

The stated and un-stated listing requirements for the NASD OTC-BB are as follows:

  • fully reporting with the U.S. Securities and Exchange Commission,
  • minimum of 40 stockholders of record holding at least 100 shares each (note: this number is informal and has been moving up),
  • must have a market maker submit 15c2-11 (Form 211) application to NASD and agree to act as market maker for securities of company.

If you need assistance in having a Form 211 filed with the NASD so that your company can trade on the OTCBB, we can help prepare that paperwork and introduce you to a market maker.

WHY INCORPORATE OR FORM AN LLC ( LIMITED LIABILITY COMPANY ) WITH UKINCORP?

You're a busy person. Why wait for days or weeks for other services to complete and file your corporate documents. Coddan completes and forwards all required documentation to your state usually the next business day. Then, once the documents are approved and returned to Coddan, we again forward your entire order, complete, to you the next business day. We also offer expediting services to complete the entire process in days or weeks rather than months!

Coddan Delaware Office

We offer several levels of service, from the basic Delaware formation of a Corporation or LLC to a complete kit to manage the entity. Several options are also available, including expedited services, IRS form completion, registered agent service and nominee services. Our range of services and offerings combine to offer you customized solutions that meet your specific needs. Coddan is dedicated to providing uncompromising service to small businesses, entrepreneurs and investors who wish to incorporate or form a Limited Liability Company in Delaware. Our services include providing incorporation and LLC filing services in Florida, Oregon, Arkansas and Nevada, Michigan, New Jersey, California, New York. We also provide the necessary forms to help successfully manage your company.

With Coddan your business start up idea can literally become a reality in hours! We offer everything a business start up or growing business needs right from free advice through to electronic Delaware company formation & company registration, plus much more. Every day we deliver corporate documents to the corporate offices of each state for our clients. We provide quality corporate services quickly and inexpensively so that you can concentrate on your business.

We register a Delaware company within 24 hours (NB: formation may take longer for certain types of companies or company names). We can incorporate a Corporation, Limited Liability Company, Limited Partnerships, and Limited Liability Partnerships in Delaware for principals who reside outside of United States. These services are well suited for those who do not have a mailing address in USA. We can also provide mail forwarding and resident registered office and registered agent services if required.

Our Office in London By choosing to use Coddan as your Delaware registered agent, you are ensured that all official state documents and service of process will be promptly forwarded to your business. You will also receive continued support with your questions regarding our services. You may cancel registered agent services at anytime as long as you provide proof that another agent has been named in the state of incorporation. Remember, in order for your business to maintain good standing status it must also maintain a registered agent. If you need an American company that is already in existence, ready to go, we have a good selection available. Buying a Delaware shelf company (Delaware ready made corporations and LLCs) may, in addition to speed, be beneficial if you need a company that was set up prior to your current financial, negotiating or legal position.

Our Classic Package represents the most economical way to fulfill the minimum requirements for full legal incorporation. This gives you everything below to get started, at the lowest possible cost. Our Service Includes:

  • Name Search
  • Preparation of Documents: Certificate of Incorporation
  • Same-day Electronic Filing Service
  • All Delaware Filing Fees (Minimum Stock Corporation or LLC)
  • First years Registered Agent and Registered Office fee (12 full months)
  • Photocopy of the Certificate of Incorporation