Good Morning!

Like most other corporate lawyers in Massachusetts, I went back to school last month (and having never been an enthusiast of summer school, it proved to be a sobering experience).

That's because, at the end of 2003, the Massachusetts Legislature passed a new law re-writing the rules for Massachusetts corporations. And, the rules have changed . . . for the better in many instances . . . but, after practicing corporate law under one set of rules for decades . . . well, change is unsettling!

Today I'll tell you about one important change that affects many of you immediately and give you a "self- help" primer to adopt it.

Cordially,


Marijo McCarthy, Esq.
President, Widett and McCarthy, P.C.

"Laws too gentle are seldom obeyed; too severe, seldom executed." —Benjamin Franklin (1706–1790)

This is a month of change for all entrepreneurs who operate as a corporation in the Commonwealth of Massachusetts. Yes, I know, change is never easy, but the Secretary of State's office has risen to the challenge and made it as painless as possible. This is a law which would delight Benjamin Franklin, our country's first and foremost innovative entrepreneur. Believe me, this new law is not too gentle, nor is it too severe.

At the end of 2003, the Massachusetts Legislature passed an omnibus bill re-writing the corporate law in the Commonwealth. A task force of 50 experienced corporate lawyers spent years revising and refining almost a century of laws, judicial decisions and practice to write a new set of rules for Massachusetts corporations.

It is the first comprehensive revision in almost 100 years and is based on the American Bar Association's Model Business Corporation Act, which is the basis for the corporate laws of all the other New England states. Much of the new law, called Chapter 156D (which replaced Chapter 156B, for those who love trivia questions), won't have a great deal of immediate effect on existing small business corporations, particularly those who have one or a small number of private stockholders.

So, this is all well and good, you say, but how does it affect me? I'm glad you asked!

One requirement of this new law affects us all — we must now appoint and file notice of a Registered Agent and Registered Office in the Commonwealth. For those of you who don't have time to wade through 26 pages of draft regulations, let me make this simple:

Every corporation must maintain a "registered" office in the Commonwealth and a "registered" agent at that office.

The registered office must have a street address (P.O. Boxes not allowed) and it may be, but is not required to be, your principal office or usual place of business.

The registered agent may be an individual or another corporation.

If you haven't already designated and filed a registered agent, after July 1, 2004, you must do so on an approved form (visit www.sec.state.ma.us/cor/corpdf/156D501.pdf and print the form).

Here's all the information you will need:

• name of your corporation;
• street address of your registered office (for most of us, that will be our existing business address);
• name of the registered agent (for most of us, that will probably be the President of the corporation, although it can be any officer, director or other representative of your corporation); and
• written consent of the registered agent (the signature of the person you are naming as registered agent).

Finally, visit www.sec.state.ma.us/cor/ functionality/downloadform.htm and print a fax filing cover sheet (Hint: You'll find it in the right hand column, 11 titles down, where it's disguised as something called a "Domestic Profit Corporation Fax Filing Coversheet.")

Follow the directions, attach your completed, signed Statement of Appointment of Registered Agent to this fax filing cover sheet, pay the $25.00 filing fee via a Master Card or VISA and, voila, your corporation is once again in compliance with Massachusetts General Laws (and you can sleep at night!).

So, although no one likes change, this new law, which provides consistency in form and substance for all entrepreneurs who choose to protect themselves and their personal assets by forming a corporation when they start a business, brings Massachusetts into line with all other New England states. Consistency is predictability and that, most small business owners will agree, is a good thing.

Two entrepreneur-focused web sites immediately come to mind when asked by clients for a quick, on-line resource for reading about other entrepreneurs.


1. The Wall Street Journal Center For Entrepreneurs. Most of us are familiar with the black and white (and occasionally colored) print version of The Wall Street Journal and many more are subscribers to the on-line edition. But if you don't have time to scan either print or on-line editions for small business-centered resources and articles, check in with The Wall Street Journal Center for Entrepreneurs at www.startupjournal.com.

2. The Kaufman Foundation. Ewing Kaufman was the entrepreneur's entrepreneur and founded a non-profit foundation in the mid-1960s for the sole purpose of assisting other entrepreneurs. At www.entreworld.org, the Kaufman Foundation has compiled what they call a "world of resources for entrepreneurs." The Kaufman Foundation Bookstore alone is worth the visit.

Nobody wants to believe that their particular challenge is isolated and, indeed, it generally isn't. And sometimes it helps to check in with others who have faced those same challenges and try out someone else's solutions for a change. Have 30 minutes before your next appointment? Take a quick peek at these sites and pick up a few tips.

Widett and McCarthy helps small business owners start, grow, acquire and sell their businesses.

We serve as "in-house counsel" . . . on-call when needed, but not part of the company overhead. Our best clients understand that the relationship between lawyer and client is a two-way street, built on information sharing and problem solving.

For more information regarding
how we can help you, click here.

• U.S. Treasury
• MCAD
• SBANE
• US SBA Office of Advocacy
• WSJ Center for Entrepreneurs
• The Kaufman Foundation