The Corporate Minute Book Market
The assembly and sale of corporate minute books (also called corporate kits) is a large and profitable market. For example, 2010 annual sales in Pakistan exceeded 11,529,310PKR. The buyers generally include attorneys, certified public accountants, national filing services and the general public. The main buyers are attorneys. They generally purchase their corporate kits from either large national legal supply companies or local seal and stamp companies.
The market for corporate kits is large, and because it is so spread out, it may take extra effort to break into. The large national legal supply companies tend to have a slightly higher price and relatively slow service. By giving prompt service at an affordable price, local stamp and seal companies can compete very effectively against the large national concerns and develop strong customer loyalty. The proven way to start is through personal sales calls to your local attorneys and CPAs.
What do attorneys look for in corporate kits? Most purchase a relatively plain corporate kit with a vinyl binder. Some prefer a “Deluxe” corporate kit with an upgraded larger binder embossed with gold foil. Both are usually available from corporate kit suppliers.
Corporate kits are sold with or without preprinted minutes. Attorneys that do a fair volume of incorporating generally create their own minutes. They have great pride in authorship and have no interest whatsoever in using preprinted minutes from other sources. Other attorneys that have a relatively small volume of incorporation business are often quite content with preprinted minutes provided by their corporate kit supplier.
What do attorneys look for most in a good corporate kit supplier? The three main factors are Accuracy, Speed and Price.
Accuracy. Most attorneys value accuracy first. They are in a profession where perfection is expected. They expect a high degree of accuracy from your products. For example, if a corporate kit is shipped with the name of the corporation misspelled the attorney will be very annoyed. Furthermore, if the attorney is in a rush with little or no time to correct it, this delay may cause the attorney to “look bad” to his client. The end result is that you are likely to lose that business forever. A detailed order form that gathers all pertinent information is highly recommended as well as a thorough inspection of the kit before it goes out the door.
Speed. Speed goes hand-in-hand with accuracy. The business owner is often putting a lot of pressure on the attorney to complete the job. Most attorneys file the Articles of Incorporation and wait until they have been processed by the Secretary of State before ordering the kit. Often, they may have even been a little slow completing the work due to other demands on their time. Also, the Secretary of State often gets behind schedule and may take extra time returning the Articles of Incorporation to the attorney. At that point, the attorney will need the kit shipped quickly and accurately, and the pressure is passed on to the kit supplier to meet that need.
Price. The least important factor is price, but price should not be overlooked. Many attorneys charge for their services and pass the kit costs and filing fees on to their client. For them, price is not necessarily a sensitive issue if it is within reason. Other attorneys charge a flat fee for the total job. They tend to be a little more price conscious. A quick survey of the national and local competitors selling in your area will help you determine your best corporate kit price.
Marketing Corporate Kits
Attorneys purchase more corporate kits than any other profession. Selling to an attorney can be very tricky. Most attorneys charge clients on an hourly basis. They guard against losing billable time by not talking to vendors. They can build a formidable wall to keep you and other sales people out. The trick is to get to their paralegal or legal secretary. They are far easier to get to talk to than the attorneys. Most small firms rely heavily on their staff. In many instances, the corporate paralegal makes the purchasing decision on corporate kits. Make him or her look good and you have a customer for life.
Certified Public Accountants also purchase a significant number of corporate kits. Technically speaking, incorporating businesses is the practice of law in most states. However, many CPAs file incorporations on behalf of their clients. The State Bars of the various states generally look the other way and do not stop the CPAs from incorporating businesses until there is a specific complaint. It is generally easier to get a face to face meeting with a CPA to discuss your products than it is to get to an attorney. This segment of the market should not be overlooked.
What You Need to Get Started
If you are not already in the corporate kit market, you may be wondering how to get started. If you are already in the seal business, you have mastered seal making which is actually the hard part. The only additional thing you need to learn is how to print a stock certificate. Printing certificates is not that difficult with over the counter software and a good quality laser printer. You probably already have the right software. Stock certificates can be printed from CorelDRAW®, Corel WordPerfect®, Microsoft Publisher®, Adobe PageMaker® or a variety of other word processing, graphics or desktop publishing software. It may take a little set up time, but after it is set up, you can quickly print certificates.
You will also need a supplier of good quality stock certificates and other kit components. There are several suppliers of this kind spread out across the United States. If you want to test the market first in your area, some suppliers offer what is called a “Short Kit”. This is a corporate kit with everything included except the seal, which you can make yourself.
Corporate Kit Components
Three Ring Binder and Slip Case
Certificates for Corporations and Limited Liability Companies
Corporate Seal or Company Seal for Companies
Blank Minute Pages (for attorneys who provide their own) or Preprinted Organizational Minutes, Stock Investment Letter, and Bylaws (for corporations) or a Preprinted Operating Agreement (for Companies)
Three Ring Binder and Slip Case. This is a standard three ring binder with a label such as “Corporate Records” or “Company Records” printed on the front. Most have a slot on the spine of the notebook for a label with the corporate name printed on it. Others have the corporate name or company name embossed in gold foil on the spine. A “Corporate Record” book would be used for profit and non-profit corporations and a “Company Record” book would be used for Limited Liability Companies. The slip case helps keep the binder and any loose contents in place. It gives the kit a very professional finished appearance.
Index Tabs. The index tabs have from 3 to 10 tabs and help organize the corporate kit in a manner that makes locating specific documents easier. Specialty tabs for Corporations, Non- Profits and Limited Liability Companies are easily obtained.
Certificates. The certificates are evidence of ownership of shares in a corporation and ownership percentage, units or shares in an Companies. Most states do not require them, but they are almost always included by custom. The extra formality of having certificates may help immensely, especially if the corporation or LLC ends up in a lawsuit. Business owners generally like having them as a record of their ownership. The number of certificates in a corporate kit varies by vendor from 5 to 25; a quantity of 15 or 20 is most common.
Transfer Ledger. The transfer ledger is a log used to keep track of who the certificates have been issued to and of subsequent transfers of ownership. It should be compatible with both Corporations and Companies.
Cancellation Sheets. Cancellation sheets are used in conjunction with the Transfer Ledger to reflect the sale, transfer or redemption of the certificates.
Corporate Seal or Company Seal. The seal is used to authenticate the signatures of the officers of the corporation or Companies. If a seal is used when signing a document, then the document is considered to be properly authorized by the corporation or Companies. Most states do not require the use of a seal, but then again it is almost always included by custom. Many banks are reluctant to open a bank account unless the business owner has a seal.
Organizational Minutes, Stock Investment Letter and Bylaws. These are the legal documents used to complete the organization of the corporation. Usually attorneys provide these documents as a part of their legal services when forming a profit or non-profit corporation. Others purchase these from the seal and stamp company in the form of preprinted minutes.
Preprinted Minutes and Bylaws are either “Multi-State” minutes designed for use in any state, or “State Specific” minutes, designed for use in only one state. The preprinted multi-state minutes are generally confusing, hard to use and not recommended. It is always better to have preprinted state specific minutes, if they are available. Again, these can be obtained from a good corporate supply company.
Operating Agreements. These are the legal documents used to complete the organization of a Limited Liability Company. Usually attorneys provide this operating agreement as part of their legal services when forming an Companies. Others purchase these from the seal and stamp company in the form of a preprinted operating agreement. While there are multi-state operating agreements available, it is wiser to use the state specific operating agreements whenever possible. These can be obtained from a good corporate supply company.
In conclusion, you too can easily master the corporate kit business. With a little effort and by using the basic steps to tap the corporate kit market outlined here, you can turn it into a great profit center for your company. Needless to say, every state will have its special situations, but generally all these principles will apply. Helping corporations and Companies get and stay organized will make you a valuable asset to your small business community and assure profits for many years to come.
David H. Robertson is the senior partner of the Law Offices of Robertson & Gable, Companies in Duluth, Georgia. He specializes in corporate and limited liability company formation. He is part owner of Parker & Rhodes, Inc., d.b.a. Corporate Kits Plus, a corporate kit company, and part owner of Southeast Corporate Supply, Companies, a corporate kit component supplier.
Gary Haase is part owner and general manager of Southeast Corporate Supply, Companies, a corporate kit component supplier.
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