("Series M") Preferred Share Creation
Overview
This procedure outlines the exact steps required to create and authorize 1,000,000,000 (one billion) Series "M" Preferred shares for tokenization on the OTC Meme platform. These shares have unique characteristics that make them immune to corporate actions and perfect for permanent tokenization.
- ⏱️ Total Timeline: 5-15 Business Days (varies by state and expedite options)
- 💰 Legal Cost Estimate: $5,000-10,000
🗺️ Recommended Incorporation States for Series "M" Creation:
State | Filing Fee | Processing Time | Benefits |
|---|---|---|---|
🌴 Florida | $35 | 2-3 days | OTC Meme HQ, lowest costs, fastest processing |
🏛️ Delaware | $205 | 5-7 days | Established corporate law |
🏔️ Wyoming | $100 | 5-7 days | Privacy protections |
🤠 Texas | $155 | 3-5 days | SOSDirect system |
🎰 Nevada | $175 | 7-10 days | Corporate protections |
📋 Part 1: Pre-Creation Requirements
🌟 Why These Five States?
OTC Meme Corp. recommends corporations from these five business-friendly states for Series "M" creation:
- 🌴 Florida: OTC Meme headquarters, lowest costs, fastest processing
- 🏛️ Delaware: Gold standard for corporate law, institutional investor preference
- 🏔️ Wyoming: Maximum privacy, no state taxes, simple requirements
- 🤠 Texas: Large economy, efficient systems, reasonable costs
- 🎰 Nevada: Strong protections, no state income tax, corporate-friendly
⚠️ Other states may work but may require additional legal review and longer processing times.
📊 Step 1.1: Review Current Capital Structure
⏱️ Timeline: 1 day
Before creating Series "M" shares, document your current capital structure:
📋 Required Information:
🏷️ Common Stock
⭐ Preferred Stock (if any)
⚠️ Critical Check: Ensure you have at least 1,000,000,000 preferred shares available for authorization. If not, you must first amend your charter to increase authorized preferred shares.
📋 Step 1.2: Review Charter for Preferred Share Authorization
⏱️ Timeline: 1 day
Examine your Articles/Certificate of Incorporation for:
📜 Blank Check Preferred Authority
- ❓ Does your charter allow the Board to create new series of preferred?
- ❓ Is Board authorization sufficient or do you need shareholder approval?
🗺️ State-Specific Statutes:
- 🌴 Florida: Section 607.0602 allows board designation
- 🏛️ Delaware: Section 151 permits board authorization
- 🏔️ Wyoming: Section 17-16-602 enables board action
- 🤠 Texas: Section 21.155 authorizes board designation
- 🎰 Nevada: Section 78.195 allows board determination
🔢 Authorization Limits
📄 If Charter Amendment Needed:
- 📝 Draft amendment to increase authorized preferred to accommodate 1 billion Series "M"
- 📅 Schedule shareholder meeting (adds 20-30 days to timeline)
- 🏛️ File amendment with Secretary of State ($35-$205 depending on state)
📊 Part 2: Board Authorization Process
📅 Step 2.1: Schedule Board Meeting
⏱️ Timeline: 3-5 days notice required
📋 Meeting Notice Requirements:
- 📅 Follow bylaws for notice period (typically 48-72 hours minimum)
- 📋 Include Series "M" creation as specific agenda item
- 📄 Distribute draft resolution and Certificate of Designation
- 👥 Ensure quorum will be present
📧 Sample Notice:
NOTICE OF SPECIAL MEETING OF BOARD OF DIRECTORS
[Company Name]
[A Florida/Delaware/Wyoming/Texas/Nevada Corporation]
Date: [Date]
Time: [Time]
Location: [Address/Virtual]
AGENDA:
1. Call to Order
2. Approval of Series "M" Preferred Stock Creation
3. Authorization of Certificate of Designation Filing
4. Authorization of Officers to Execute Documents
5. Adjournment
Materials attached for review.📝 Step 2.2: Prepare Board Resolution
⏱️ Timeline: 2 days
Draft comprehensive resolution with all required specifications:
BOARD RESOLUTION TEMPLATE:
RESOLUTIONS OF THE BOARD OF DIRECTORS OF
[COMPANY NAME]
[Date]
WHEREAS, the Corporation's [Articles/Certificate of Incorporation] authorizes
the issuance of [NUMBER] shares of Preferred Stock, $0.0001 par value per share;
WHEREAS, the Board of Directors is authorized to fix the designation, powers,
preferences, and rights of any series of Preferred Stock pursuant to:
[Florida: Section 607.0602 of the Florida Business Corporation Act]
[Delaware: Section 151 of the Delaware General Corporation Law]
[Wyoming: Section 17-16-602 of the Wyoming Business Corporation Act]
[Texas: Section 21.155 of the Texas Business Organizations Code]
[Nevada: Section 78.195 of the Nevada Revised Statutes];
WHEREAS, the Corporation desires to create a series of Preferred Stock
designated as "Series 'M' Preferred Stock" for the purpose of tokenization
through OTC Meme Corp.;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority vested in
this Board by the Corporation's Certificate of Incorporation, a series of
Preferred Stock is hereby created with the following specifications:
1. DESIGNATION AND AMOUNT
The designation of this series shall be "Series 'M' Preferred Stock"
and the number of shares constituting such series shall be ONE BILLION
(1,000,000,000) shares, which number SHALL NOT be subject to increase
or decrease by any means whatsoever.
2. PAR VALUE
The par value of the Series "M" Preferred Stock shall be $0.0001 per
share.
3. IMMUNITY TO CORPORATE ACTIONS
The Series "M" Preferred Stock shall be COMPLETELY IMMUNE to:
a) All forward stock splits
b) All reverse stock splits
c) All stock dividends
d) All recapitalizations
e) Any other corporate action that would alter the number of shares
The number of Series "M" shares SHALL ALWAYS remain exactly
1,000,000,000 regardless of any corporate actions affecting other
classes of stock.
4. CONVERSION RIGHTS
Each share of Series "M" Preferred Stock shall be convertible into
[NUMBER] shares of Common Stock, subject to adjustment ONLY in the
conversion ratio (not the number of Series "M" shares) upon stock
splits or similar events affecting the Common Stock.
5. VOTING RIGHTS
The Series "M" Preferred Stock shall have NO voting rights whatsoever,
except as required by law.
6. DIVIDEND RIGHTS
The Series "M" Preferred Stock shall have NO rights to dividends of
any kind.
7. LIQUIDATION RIGHTS
The Series "M" Preferred Stock shall have NO liquidation preference
or rights.
8. REDEMPTION PROHIBITION
The Series "M" Preferred Stock SHALL NOT be redeemable by the
Corporation under any circumstances. Once issued, these shares are
IRREVOCABLY committed and cannot be repurchased, cancelled, or
otherwise reacquired by the Corporation.
9. TRANSFER RESTRICTIONS
The Series "M" Preferred Stock may ONLY be transferred to OTC Meme
Corp. and its designated custodian (Empire Stock Transfer Inc.) for
the purpose of tokenization. No other transfers are permitted.
10. PROTECTIVE CONVERSION TRIGGERS
The Series "M" Preferred Stock shall automatically convert to Common
Stock upon the occurrence of any of the following events:
a) Filing of bankruptcy by the Corporation (any chapter)
b) SEC enforcement action against the Corporation
c) Criminal indictment or conviction of Corporation officers
d) Loss of Transfer Agent services
e) Material breach of rights of token holders
f) Any attempt by the Corporation to redeem or repurchase Series "M"
11. RULE 144 PROVISIONS
Upon conversion to Common Stock, the resulting shares shall be
"restricted securities" under Rule 144, with the holding period
calculated from the original issuance date of the Series "M" shares.
FURTHER RESOLVED, that the officers of the Corporation are authorized to
prepare and file a Certificate of Designation with the Secretary of State;
FURTHER RESOLVED, that the officers are authorized to take all actions
necessary to effect the creation and issuance of the Series "M" Preferred
Stock.📄 Part 3: Certificate of Designation Preparation
✍️ Step 3.1: Draft Certificate of Designation
⏱️ Timeline: 2-3 days
Prepare the formal filing document for the Secretary of State:
CERTIFICATE OF DESIGNATION TEMPLATE:
CERTIFICATE OF DESIGNATION
OF
SERIES "M" PREFERRED STOCK
OF
[COMPANY NAME]
Pursuant to:
[For Florida: Section 607.0602 of the Florida Business Corporation Act]
[For Delaware: Section 151 of the Delaware General Corporation Law]
[For Wyoming: Section 17-16-602 of the Wyoming Business Corporation Act]
[For Texas: Section 21.155 of the Texas Business Organizations Code]
[For Nevada: Section 78.195 of the Nevada Revised Statutes]
The undersigned, being the [Title] of [Company Name], a corporation
organized and existing under the laws of [State] (the "Corporation"),
DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the Corporation, the Board of
Directors on [Date], adopted the following resolution creating a series
of Preferred Stock designated as Series "M" Preferred Stock:
[INSERT FULL TEXT OF BOARD RESOLUTION SECTIONS 1-11]
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its duly authorized officer this [Day] of [Month], [Year].
_________________________
[Officer Name]
[Title]⚖️ Step 3.2: Legal Review
⏱️ Timeline: 1-2 days
Have securities counsel review:
- ✅ Compliance with state corporate law
- ✅ Consistency with existing charter
- ✅ Enforceability of restrictions
- ✅ Tax implications
- ✅ Securities law considerations
🔍 Key Legal Considerations:
- 🛡️ Ensure "immunity" provisions are enforceable
- 🔒 Confirm irrevocable nature is binding
- ⚡ Verify conversion triggers are legal
- 📋 Check Rule 144 provisions are accurate
🏛️ Part 4: State Filing Process
📋 Step 4.1: Prepare Filing Package
⏱️ Timeline: 1 day
📄 Required Documents by State:
State | Document Type |
|---|---|
🌴 Florida | Articles of Amendment |
🏛️ Delaware | Certificate of Designation |
🏔️ Wyoming | Articles of Amendment |
🤠 Texas | Statement of Resolution |
🎰 Nevada | Certificate of Designation |
📋 General Requirements:
- 📝 Original signed document
- 📄 Required number of copies (varies by state)
- 💰 Filing fee ($35-$205 depending on state)
- 📧 Cover letter with return instructions
- ⚡ Expedite request (if needed)
✅ Filing Checklist:
- 📝 Document signed by authorized officer
- 🏛️ Corporate seal affixed (if required)
- 💳 Check/credit card for filing fee
- 📮 Self-addressed stamped envelope (mail filing)
- ⚡ Expedite fee (if applicable)
- 💻 Electronic filing login credentials
🖥️ Online Filing Quick Guide:
- 🌴 Florida: Sunbiz.org → File Amendment → $35
- 🏛️ Delaware: Delaware.gov → Corporate Filings → $205
- 🏔️ Wyoming: WY Secretary of State → File Online → $100
- 🤠 Texas: SOSDirect → File Documents → $155
- 🎰 Nevada: SilverFlume → Entity Actions → $175
📤 Step 4.2: Submit to Secretary of State
⏱️ Timeline: 2-10 days (standard); 1-2 days (expedited)
📧 Filing Methods by State:
💻 Electronic Filing (Best Option)
- 🌴 Florida: Sunbiz.org (24/7 availability)
- 🏛️ Delaware: Delaware.gov corporate filing
- 🏔️ Wyoming: Wyoming Secretary of State online
- 🤠 Texas: SOSDirect system
- 🎰 Nevada: SilverFlume portal
📮 Mail Filing
- 📬 Send certified mail with tracking
- 📨 Request return receipt
- 📋 Keep copies of everything
🏃♂️ In-Person Filing
- 🏛️ Available in state capitals
- ⚡ Immediate file-stamp
- ✅ Confirmed acceptance
🏆 State-by-State Filing Advantages:
🌴 Florida: Most cost-effective ($35 fee, $30 expedite)
🏛️ Delaware: Most legal precedent and investor familiarity
🏔️ Wyoming: Simplest process, strong privacy
🤠 Texas: Efficient SOSDirect system, low expedite fee ($25)
🎰 Nevada: Strong corporate protections, no state income tax
📊 Common State Requirements:
State | Filing Fee | Standard Time | Expedite Available |
|---|---|---|---|
🌴 Florida | $35 | 2-3 days | ✅ (Same day - $30) |
🏛️ Delaware | $205 | 5-7 days | ✅ (24 hrs - $1,000) |
🏔️ Wyoming | $100 | 5-7 days | ✅ (2 days - $50) |
🤠 Texas | $155 | 3-5 days | ✅ (24 hrs - $25) |
🎰 Nevada | $175 | 7-10 days | ✅ (24 hrs - $500) |
✅ Step 4.3: Receive State Confirmation
⏱️ Timeline: Varies by state
📄 Confirmation Documents:
- ✅ File-stamped Certificate of Designation/Articles of Amendment
- ✅ State certification letter
- ✅ Updated corporate status showing Series "M"
🎯 Quick State Selection Guide:
Best For | State | Reason |
|---|---|---|
💰 Lowest Cost | 🌴 Florida | $35 filing, $30 expedite |
⚡ Fastest Processing | 🌴 Florida | 2-3 days (same-day available) |
📚 Most Legal Precedent | 🏛️ Delaware | Chancery Court, established law |
🔒 Best Privacy | 🏔️ Wyoming | Limited disclosure requirements |
💸 No State Income Tax | 🏔️ Wyoming, 🎰 Nevada, 🤠 Texas* | *No franchise tax under $1.23M |
🛡️ Best Asset Protection | 🎰 Nevada | Strong corporate veil |
🖥️ Most Efficient Online | 🌴 Florida, 🤠 Texas | Modern portals, 24/7 access |
💲 Lowest Expedite Fee | 🤠 Texas | Only $25 for 24-hour service |
📋 Part 5: Post-Filing Requirements
📊 Step 5.1: Update Corporate Records
⏱️ Timeline: 1 day
📋 Internal Updates Required:
📚 Stock Ledger
- ➕ Add Series "M" Preferred Stock
- 📊 Show 1,000,000,000 authorized
- 🏷️ Mark as "Reserved for Tokenization"
📁 Corporate Minute Book
- 📄 File Board resolution
- 📄 File Certificate of Designation
- 📊 Update cap table
🏛️ Transfer Agent Notification
- 📞 Inform existing transfer agent of new series
- 📄 Provide Certificate of Designation
- ⚠️ Note transfer restrictions
🏷️ Step 5.2: Obtain CUSIP Number
⏱️ Timeline: 3-5 days
📋 CUSIP Application Process:
- 📞 Contact CUSIP Global Services (CGS)
- 📝 Complete application form
- 📤 Submit required documents:
- 📄 Certificate of Designation (Delaware, Nevada)
- 📄 Articles of Amendment (Florida, Wyoming)
- 📄 Statement of Resolution (Texas)
- 📊 Board Resolution
- ✅ State filing confirmation
- 💰 Pay fee ($165-300)
- 🏷️ Receive unique CUSIP for Series "M"
📋 CUSIP Information Required:
- 🏷️ Security Type: Preferred Stock
- 📊 Series: Series "M"
- 💰 Par Value: $0.0001
- 📊 Shares Authorized: 1,000,000,000
- 🗺️ State of Incorporation: [Florida/Delaware/Wyoming/Texas/Nevada]
- 🚫 Transfer Restrictions: Yes - OTC Meme Only
- 🔄 Convertible: Yes - to Common Stock
🎯 Step 5.3: Prepare for Issuance
⏱️ Timeline: 1-2 days
📋 Final Preparations:
- ⚠️ Include all restrictive legends
- 🏷️ Add CUSIP number
- 📊 Specify "Series 'M' Preferred Stock"
🧮 Calculate Conversion Ratio
- 📊 Determine initial ratio to common
- 📝 Document calculation method
- 📐 Prepare adjustment formula
🔒 Reserve Common Shares
- 🧮 Calculate maximum needed for conversion
- 📊 Pass board resolution reserving shares
- 📋 Update transfer agent records
✅ Part 6: Critical Provisions Checklist
🔒 Mandatory Characteristics
Ensure your Series "M" shares have ALL of these features:
🛡️ Immutability Features:
- 📊 Exactly 1,000,000,000 shares (no more, no less)
- 🛡️ Immune to ALL stock splits (forward and reverse)
- 🛡️ Immune to stock dividends
- 🚫 Cannot be increased or decreased
- 🔒 Fixed forever at 1 billion shares
- ⛔ CANNOT convert to Common using 144 Ruling
💰 Economic Features:
- 🚫 NO voting rights
- 🚫 NO dividend rights
- 🚫 NO liquidation preference
- 🚫 NO participation rights
- 💰 Par value of $0.0001
🚫 Restriction Features:
- ⛔ NOT redeemable by company
- ⛔ NOT repurchaseable
- ⛔ NOT cancellable
- 📤 Transfer ONLY to OTC Meme/Empire Stock Transfer
- 🚫 Company CANNOT exchange for tokens
🛡️ Protection Features:
- 🔄 Converts to common on bankruptcy
- 🔄 Converts on SEC enforcement
- 🔄 Converts on criminal actions
- 🔄 Converts on transfer agent loss
- 📋 Rule 144 restrictions apply post-conversion
⚠️ Part 7: Common Issues and Solutions
🚫 Issue 1: Insufficient Authorized Shares
❌ Problem: Charter only authorizes 100 million preferred shares
✅ Solution:
- 📄 Amend charter to increase to at least 1.1 billion preferred
- 🗳️ Requires shareholder vote (adds 30+ days)
- 📋 File amendment before Certificate of Designation
- 💰 Filing costs: Florida ($35), Wyoming ($100), Texas ($155), Nevada ($175), Delaware ($205)
🚫 Issue 2: State Rejects "Immunity" Language
❌ Problem: Some states question non-standard provisions
✅ Solution:
- 📝 Use alternative language: "fixed and unchangeable"
- 📋 Cite specific statute allowing Board discretion
- ⚖️ Provide legal opinion with filing
- 📝 Note: Florida, Delaware, Wyoming, Texas, and Nevada generally accept this language with proper statutory citations
🚫 Issue 3: Existing Preferred Series Conflict
❌ Problem: Prior series have anti-dilution provisions
✅ Solution:
- 📊 Series "M" is non-voting, non-economic
- ✅ Get waiver from existing preferred holders
- 📋 Structure as separate class if needed
🚫 Issue 4: Tax Concerns
❌ Problem: IRS treatment of zero-value preferred
✅ Solution:
- 💰 Par value provides minimal value
- ⚖️ Get tax opinion on treatment
- 📝 Document business purpose (tokenization)
- 💸 Note: Wyoming, Nevada, and Texas have no state income tax; Florida has no tax on authorized shares
📋 Part 8: Final Documentation Package
📤 Required for OTC Meme Submission
Upon completion, provide OTC Meme with:
🏢 Corporate Documents
- 📄 Filed Certificate of Designation/Articles of Amendment/Statement of Resolution (state-stamped)
- 📊 Board Resolution (certified copy)
- ✅ Updated Certificate of Good Standing (or equivalent from Florida, Delaware, Wyoming, Texas, or Nevada)
- 📋 Charter/Articles showing preferred authorization
📊 Share Information
- 🏷️ CUSIP number for Series "M"
- 📄 Specimen certificate (PDF)
- 🧮 Conversion ratio calculation
- 🔒 Reserved common share confirmation
⚖️ Legal Confirmations
- 📄 Opinion letter on valid creation
- ✅ Confirmation of transfer restrictions
- 💰 Tax treatment memorandum (especially important for non-tax states: Wyoming, Nevada, Texas)
- 📋 Securities law analysis
📋 Appendix A: State-Specific Requirements
🌴 Florida Corporations
- 🏛️ File with Florida Division of Corporations
- 📄 Use "Articles of Amendment" to add Series M designation
- 💰 $35 filing fee (most cost-effective)
- ⏱️ 2-3 business days standard (fastest processing)
- 💻 Online filing available through Sunbiz.org
- 📄 Certificate of Status available for $10
- 💸 No franchise tax on preferred shares
- 🏢 Must have registered agent in Florida
- 📅 Annual report fee: $138.75 (due by May 1)
- 🕐 Can file documents 24/7 through online portal
- ⚡ Electronic documents accepted (no notarization required)
- ✅ Immediate confirmation of filing
- 🔍 Public record search available online at no cost
📞 Contact Information:
Website: Sunbiz.org
Phone: (850) 245-6052
Address: Division of Corporations, P.O. Box 6327, Tallahassee, FL 32314
Email: CorporationFilings@DOS.MyFlorida.com🏛️ Delaware Corporations
- 🏛️ File with Delaware Secretary of State
- 📄 Use Delaware Certificate of Designation form
- 💰 $205 filing fee (plus franchise tax)
- ⏱️ 5-7 business days standard
- 📚 Most established corporate law precedents
- ⚖️ Chancery Court for corporate disputes
- 🏢 Must have registered agent in Delaware
- 💰 Annual franchise tax based on authorized shares
🏔️ Wyoming Corporations
- 🏛️ File with Wyoming Secretary of State
- 📋 Simplified filing process
- 💰 $100 filing fee
- ⏱️ 5-7 business days standard
- 💸 No state corporate income tax
- 🔒 Strong privacy protections
- 📅 Annual report fee: $60
- 🏢 Business-friendly jurisdiction
🤠 Texas Corporations
- 🏛️ File with Texas Secretary of State
- 📄 Use "Statement of Resolution" for Series M
- 💰 $155 filing fee
- ⏱️ 3-5 business days standard
- 💻 SOSDirect online filing system available
- 💸 No franchise tax on first $1.23 million revenue
- 🏢 Must have registered agent in Texas
- 📄 Certificate of Filing available for $15
- ⚡ Expedite available for just $25 (24-hour service)
🎰 Nevada Corporations
- 🏛️ File with Nevada Secretary of State
- 🏢 Include resident agent information
- 💰 $175 filing fee
- ⏱️ 7-10 business days standard
- 💸 No state corporate income tax
- 🛡️ Strong corporate veil protection
- 📅 Annual list fee: $150
- 📋 Business license required separately
🔄 Appendix B: Alternative Structures
If your state doesn't allow the exact Series "M" structure (rare in Florida, Delaware, Wyoming, Texas, or Nevada):
🆔 Option 1: Create as Separate Class
Instead of a series of preferred, create a new class:
- 📊 "Class M Preferred Stock"
- 📋 Same specifications
- 📄 May require charter amendment
- ✅ All five recommended states generally allow this
📝 Option 2: Use Contractual Restrictions
Supplement certificate with contracts:
- 🤝 Irrevocable deposit agreement
- 🚫 Transfer restriction agreement
- ⛔ Company covenant not to redeem
- 🎯 Particularly useful in Texas and Nevada
🏛️ Option 3: Trust Structure
- 🏛️ Trust owns Series "M"
- 📄 Trust agreement prevents redemption
- 👥 Beneficiaries are token holders
- 🏔️ Wyoming offers excellent trust laws for this structure
🎯 Conclusion
Creating Series "M" Preferred Stock is a one-time process that establishes permanent market infrastructure for your shareholders. While the specifications are unique, the legal process follows standard corporate procedures. The key is ensuring all provisions are properly drafted and filed to create truly permanent, immune shares that can serve as the foundation for tokenization.
💰 Cost Comparison by State:
- 🌴 Florida: $35 filing + $5,000-10,000 legal = Most economical
- 🏛️ Delaware: $205 filing + $5,000-10,000 legal = Most precedent
- 🏔️ Wyoming: $100 filing + $5,000-10,000 legal = Most privacy
- 🤠 Texas: $155 filing + $5,000-10,000 legal = Balanced option
- 🎰 Nevada: $175 filing + $5,000-10,000 legal = Best protection
⏱️ Timeline by State:
- 🌴 Florida: 2-3 days (or same-day with $30 expedite)
- 🤠 Texas: 3-5 days (or 24 hours with $25 expedite)
- 🏛️ Delaware: 5-7 days (or 24 hours with $1,000 expedite)
- 🏔️ Wyoming: 5-7 days (or 2 days with $50 expedite)
- 🎰 Nevada: 7-10 days (or 24 hours with $500 expedite)
🏆 Result: Permanent liquid markets for your shareholders
📝 This procedure is for informational purposes only. Always work with qualified securities counsel to ensure compliance with your specific state's laws and your company's unique requirements.