To Approve An Amendment To The Companys Certificate Of Incorporation, As Amended, To: Fill & Download for Free

There are subtle variations from state to state, but in general:After incorporating the company by filing a Certificate of Incorporation, the incorporator appoints the initial director(s) to the Board using a document called "Action by Incorporator." Usually this document also adopts the initial Bylaws.The Bylaws (and sometimes also the Certificate of Incorporation) establish the number of seats on the Board. Sometimes it's a range (e.g., 3 to 7), to be set from time to time by vote of the Board itself. There can be unfilled vacancies; usually the Bylaws allow the other incumbent directors to fill any vacancy by vote.Many startups have only one director to start with (the founder). Others will have two or three. Odd numbers are preferable because they avoid the possibility of a tie vote.If not appointed in the initial Action by Incorporator, additional directors need to be appointed either by vote of the incumbent director(s), if allowed by the Bylaws (e.g., to fill an authorized but vacant seat), or by shareholder vote. Well-drafted charter documents allow these things to be done by unanimous written consent rather than holding a meeting.At the beginning, directors are usually just the founders and perhaps a friendly person or two that's helping advise the company. A small "friends and family" round or convertible debt bridge financing is unlikely to change that. When the company closes a more substantial round of equity financing, usually the investors will ask for a Board seat. The mechanics and documentation are beyond the scope of this answer, as things get complicated in a hurry: The investment usually is in Preferred Stock, the Certificate of Incorporation is amended or restated to include many pages of additional language relating to the rights and preferences of the Preferred; a set of "protective provisions" will be negotiated giving the Preferred investors veto power over certain fundamental actions; and so forth.Most directors will want to be indemnified by the company against liabilities connected to their service. This is usually done both in the Bylaws and with a separate Indemnification Agreement entered into with each director. Those agreements should be approved by shareholders to maximize their chances of being enforced in court.It's a good idea to start cultivating potential independent directors early in a company's life. If things go well, you'll want to add at least one or two to offset the presence of investor directors on the Board; it reflects well on the company to have respected/prominent outsiders on the Board; and if the company every makes it to an IPO, stock exchange rules these days require independent outside directors on the Board.None of this is rocket science, but it isn't boilerplate either. When in doubt, consult an experienced startup lawyer to guide you through the process and generate the necessary stack of documents.

In my observation a priced / preferred round normally comes with a bunch of protective provisions, including veto rights on several things like amendments to the Certificate of Incorporation that are needed in order to complete subsequent rounds. A convertible note or a small friends and family investment in any form (for example, a contract with an accelerator) normally does not include these rights but there are some counterexamples. It's debatable whether a 10% seed round should but that depends on the relative bargaining power, sophistication, and level of involvement of the founders vis-a-vis the investor.A minority investor without protective rights is almost completely at the mercy of company management. At the extremes, there are typically legal provisions they can invoke to deal with fraud, abusive dilution, fiduciary breaches, and so on. But they have no direct way to deal with poor decision-making on the part of the founders. By contrast, an investor has the power to halt the company and potentially drive it out of business if they do not agree with a proposed company decision over which they hold a veto right. Whether this is going to be a good thing or bad thing for the company depends on whether the investor is knowledgeable, ethical, trustworthy, understands the business and sees things clearly and rationally.If you consider your investor, is this the kind of person who would be a plus or a minus if you were stranded with them after a shipwreck — running a company is sometimes like that. If yes, then you can place some trust in them that they will not abuse their position to destroy the company or hold it for ransom. If no, you may want to consider whether you really need their money, veto or no veto.Regarding the mechanism, if you propose a new funding round that wipes out some of the rights of the current investors, as most do, the round needs to be approved by both the company and those investors. They'll vote to approve and either get an amendment or waiver, a new set of corporate documents will get signed and filed (articles, stockholder agreement, buy-sell agreements, and potentially bylaws and others), and stock issued to the new investors. It's a very good idea to have a majority vote provision that serves as a drag-along, so that you don't have to get approval from every last investor, just a majority of investors.

You've just bothered a lawyer, because I'm one. This question isn't answerable without reviewing all of the paperwork.Assuming the investment is a standard startup tech style preferred stock round, the company's subscription limits may or may not be capped as to time and total amount by (among other things) any promises or reps and warranties made in the stock purchase agreement the company signed with investors, the Board and Shareholder approvals, disclosure materials, the certificate of incorporation's authorization of preferred stock, and any protective provisions put into the funding documents requiring investor approval for waivers or for admitting new investors. It also depends what has closed to date. The Board / investor / shareholder notice and approval process for waiving these limits, amending the agreements, and-refiling a further amendment to the Certificate of Incorporation, in turn, are found in those documents and/or the company bylaws.If the company is using a note as implied by the question, there is a similar but less complicated issue of finding what promises have been made to date and what the procedure is for approving / amending / waiving them.Either way you're going to need a lawyer. As a guess, the lawyer who already ran your convertible note round (I hope — if you did this yourself, all bets are off) should be able to do the amendments in the $500-$1,500 range for notes and $2,000 to $5,000 range for equity financing at small firm rates, less if it turns out you don't need any new paperwork, somewhat more if you need to bring a new lawyer up to speed for the task, and about double that at big firm rates. If it's worth spending that as a transaction cost for your company to raise the extra $200-$215K, go for it.