Legal Question in Business Law in California

Re: Starting a Corporation with Power of Attorney

It should be sufficient...but it is always better if your father can atleast sign the article of incorporation...other things can be done with his power of attorney. I do not think it is necessary to register your power of attorney with the Secretary of State but I need to look into that !!!

Re: Starting a Corporation with Power of Attorney

The first thing you need to understand is that ANYONE can form a corporation....you don't need a power of attorney or anything. You simply sign the Articles of Incorporation as the incorporator.

Once the corporation is incorporated, it is a separate and distinct legal 'person' in its own right, existing under law in its own corporate name. It requires human persons as directors and officers. At some point, it will presumably have owners (shareholders) who need not be humans but can be other corporations (for example).

So, the question arises why your father's involvement is necessary at all. If the idea is to have him be the owner, simply issue all the stock to him in exchange for something of value. If the idea is to use his name as the corporation's, just get his permission (being sure to use 'Inc." or "Corp." in the name as well). If the concept is that he will act as a director or officer, you probably need his actual, in person involvement; a power of attorney cannot be used to hide the identity of the corporate decision-maker.

Indeed, if the purpose of the transactions you propose is to deceive or defraud anyone, avoid taxes, or hide assets, some or all parts of your incorporation and start-up process may be void and you could be subject to civil lawsuit or prosecution.

Re: Starting a Corporation with Power of Attorney

The power of attorney, if its powers include that power, can be used, as long as doing so benefits your father--this is the test for transactions under a power of attorney.

You will encounter resistance along the way, from the IRS, banks, and perhaps vendors to the corporation, so I would recommend consulting with an attorney before formation and using the attorney for formation. You may also discover the goals for forming the corporation are better met by using a different entity or vehicle.