Neil Patel

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What is an Amended and Restated Certificate of Incorporation? An Amended and Restated Certificate of Incorporation is a legal document filed with the Secretary of State that restates, integrates, and adjusts the startup’s initial Articles of Incorporation (i.e. the company’s Charter).

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    When you file an Amended and Restated Certificate of Incorporation, it usually gets done in conjunction with purchasing a new class of stock.

    To establish the rights and preferences of the new class of stock, the startup must file the Amended and Restated Certificate of Incorporation.

    Before beginning to do business in the State, most companies, including startups, must submit administrative paperwork with the Secretary of State’s Office.

    This document is known as “Articles of Incorporation” or “Certificate of Incorporation” for a corporation or startup and “Articles of Organization” for a Limited Liability Company (LLC).

    These documents are a public record that anyone can access to determine who started the startup or business.

    The following information needs to reflect on the documents:

    A Registered Agent is an individual or business who must have a regular address, be reachable, and easily be found to serve legal notice on the startup or business.

    For a corporation, each incorporator’s name and address must get listed in the Articles of Incorporation.

    In addition, LLCs and corporations must file an Annual Report to ensure the information recorded with the State stays up to date, along with fueling the state with more revenues.

    Sole proprietorships and partnerships don’t need to register with the state unless they plan to conduct business under a name different from the owners. If this occurs, a “fictitious name” needs to get filed and registered.

    Most startups and businesses prefer to provide only the bare minimum of information about themselves in public records.

    However, a company’s Bylaws – in the case of a corporation – or the Operating Agreement – in the case of an LLC – provide more extensive information about how the company will run.

    Certificate of Amendment

    Certificate of Amendment is a legal document that a startup or business must fill out to show any changes to the company. You will typically see those when there is a financing round in place and new investors enter the cap table of the company.

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    In essence, the State requires a corporation to complete a Certificate of Amendment whenever it needs to alter, add to, or delete information on its initial formation documents.

    What You Need to Know About Certificate of Amendments

    You need to complete a Certificate of Amendment if one of the following occurs to your startup:

    • The legal name of the company changes.
    • The nature of the business changes
    • The company’s Certificate of Incorporation Articles of Incorporation have changed
    • The company’s stock has changed
    • There are changes in ownership

    Every state has its requirements on what changes need to get covered in the Certificate of Amendment, but the most common information required includes:

    • The original filing name of the company
    • The provision number that’s getting amended
    • Any new wording to an amended provision
    • A statement of approval from the company’s board of directors
    • A statement of approval from the company’s shareholders, if appropriate
    • The president and secretary of the corporation’s signatures

    What Steps to Follow When Completing a Certificate of Amendment

    Firstly, you must make any operational changes to the corporation within its Articles of Incorporation limitations before you will be able to create a Certificate of Amendment.

    The Articles of Incorporation only need to get amended if you’re making changes to the following:

    • Company’s name
    • Purpose
    • Intended duration
    • Stocks, shares, and ownership
    • Address
    • Registered Agent

    Depending on your startup’s State, specific provisions are only valid if they get included in the Certificate.

    • Regulating, limiting, or creating the powers of the directors or stockholders
    • Restructuring the startup
    • Limiting the startup’s duration
    • Giving preemptive stockholder rights to acquire extra stock
    • Increasing the number of votes needed to take action from stockholders or directors
    • Limiting certain director liabilities
    • Making owners personally liable for the company’s debt

    You can get a vote from the company’s authorized officers or board members once you’ve determined which adjustments need to be made, according to the conditions outlined in the Articles of Incorporation.

    This step usually gets completed during a board meeting, but a shareholder’s vote is required in other cases.

    If you need to file an amendment after the vote, you need to consult with an attorney. Your attorney will advise you on which paperwork to complete to avoid the risk of state-imposed fines or legal actions.

    Getting Information from the Secretary of State

    If you’re unsure what your state requires, you can verify the information directly with the Secretary of State. The Secretary of State’s website will also have all the necessary documents to complete the Amendment.

    The forms are available for download, but you can also get a copy in person at their office. If you have questions, you can also contact the Secretary of State’s office.

    Depending on your State, you may be required to submit an online form or a handwritten form. Read the instructions that are shown on the form carefully to ensure you understand the instructions correctly.

    Ensure to number any modifications in the document according to your Articles of Incorporation’s original numbering system.

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    For example, if a provision got established in Article Two, reference Article Two on the amendment form. Obtain the needed signatures for the Certificate of Amendment and file it after it is completed.

    Filing electronically through the Secretary of State‘s website is generally advised because there’s less risk you’ll leave the form blank, and modifications will be approved faster than if you mailed it.

    However, your State might not accept electronic filings in some situations, in which case you’ll have to mail the paperwork. Therefore, ensure you include any additional papers required by the State.

    A cover page, verification of a new startup name’s availability, or an affidavit authorizing the modifications are examples of such documents.

    With a small number of revisions, this approach may be preferable because it appears to be more convenient. In addition, the amendment document may take less work, and the procedure can be repeated.

    Amended and Restated Certificate of Incorporation

    Suppose your company has been amended several times over the years. In such a scenario, you’ll have to go back and forth between your original documents and each Amendment to make sure you’re reading the most recent expression of the parties’ intent.

    This can lead to mistakes, include conflicting clauses in your Agreement, make it more challenging to grasp your contractual duties, and make it harder to accurately define your effective legal obligations as of a given period.

    You might want to Amend and Restate your contract to address this issue.

    Therefore, as a second option, you can do the following:

    • Make amendments directly in the initial contract
    • Ensure all parties sign the contract
    • Ensure the contract is labeled as “amended and restated”
    • Have a clause included to rescind all past agreements

    Using this method, you are delivering your original agreement in its entirety, as well as your amendments.

    It’s more practical to have a single contract that captures all of your previous amendments and alterations in one document that’s been restated and amended.

    How to Amend and Restate a Contract

    If you have signed a contract previously, it may have been amended multiple times since then.

    Therefore, it may be challenging to read the contract, as you need to consider your initial agreement with all the subsequent amendments to understand your legal obligations.

    You can amend and restate your contract to have only one contract that includes all previous changes and amendments to make things easier for you.

    This can be referred to as an Amended and Restated Agreement (A&R Agreement).

    To draft an Amended and Restated Agreement, you need to follow these four steps:

    #1: Get your contracts together

    • Read your initial contract.
    • Then, keep track of all of your amendments and read them to ensure that you are fully aware of your legal requirements.
    • Keep track of all of your contract exhibits, schedules, and annexes.
    • During the amendment process, keep track of any new exhibits, schedules, or annexes added or removed.

    #2: Each Amendment should be incorporated into the original contract

    • Take your initial Agreement and, one by one, integrate the terms and conditions of each Amendment.
    • Ensure your initial Agreement has “Amended and Restated” in the title.
    • Provide background information on the backdrop for each Amendment in your recitals so you can readily monitor the Agreement’s progress.
    • Incorporate the new contract language and terminology into the initial Agreement.
    • Make any additional changes or removals to the Agreement.

    #3: Ensure a merger clause is included

    • A merger clause is also known as an integration clause and needs to be included. The clause will make sure you altogether rescind and replace the initial contract with the previous amendments.

    #4: Implement the Amended and Restated Agreement

    • All parties should evaluate and comment on the draft of your Amended and Restated Agreement.
    • To make the review process easier for both parties, share the initial contract and any amendments.
    • Implement the Amended and Restated Agreement.

    Rules for Amendment and Restated Agreements

    There aren’t any established rules for when you must Amend and Restate an Agreement, but usually, a document gets amended or restated in the following instances:

    • The main contract and its later additions are difficult to read due to the excessive number of amendments and modifications.
    • For ease of reference and the sake of transparency to the contract.
    • The addition of more amendments to a contract can cause uncertainty.
    • You’re worried about putting in conflicting responsibilities in your contract.
    • To ensure that both parties are aware of the terms and conditions that apply.

    The Amended and Restated Agreement

    Amending and Restating an Agreement is the act of changing specific aspects of an initial document and then reproducing the whole ‘original’ Agreement together with the changes in a single document.

    The process of an Amended and Restated Agreement can apply to various agreements, including:

    • Amended and Restated Shareholder Agreement
    • Amended and Restated Recitals
    • Amended and Restated Operating Agreement
    • Amended and Restated Corporate Bylaws
    • Amended and Restated Services Agreement
    • Amended and Restated Partnership Agreement
    • Amended and Restated License Agreement
    • Amended and Restated Articles of Incorporation
    • Amended and Restated LLC Agreement

    You will notice that nearly any Agreement can be Amended and Restated, and it’s common in corporate law.

    Amended and Restated Agreement Vs. Amendment

    An Amended Agreement or Amendment is when you change a contract, document, or Agreement, and you refer to only the portions or clauses that are being amended, modified, or rescinded.

    You do not “restate” or “reproduce” all of the terms and conditions of the initial Agreement being revised in a standard amendment.

    Following the Amendment, you’ll need to read both the initial Agreement and the Amendment side by side to fully comprehend the contract’s legal ramifications, as both the initial Agreement and the Amendment continue to have legal consequences.

    When you revise the terms and conditions of your initial Agreement throughout the whole body of your initial Agreement, it is known as an Amended and Restated Agreement.

    This essentially means you have your entire initial Agreement with your modification, deletions, and amendments embedded in it.

    The initial Agreement is repealed and entirely replaced with the Amended and Restated Agreement upon the Amendment and Restatement of your contract.

    Conclusion

    When you Amend and Restate an Agreement, the legal impact is usually to replace all past Agreements between the parties with one document that reflects the parties’ current legal duties.

    This is why you should take the time to understand what is an Amended and Restated Certificate of Incorporation.

    Your initial Agreement remains in full force and effect and must be read in combination with each Amendment when you update an Agreement without re-stating it.

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    Neil Patel

    I hope you enjoy reading this blog post.

    If you want me to help you with your fundraising, just book a call.

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