Home  Articles Business Basics Incorporating a Business
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Incorporating a Business |
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Page 4 of 13 Steps To Incorporate Your Business
Incorporating your business is a tough decision to make, but once you do make that choice you have to follow certain steps to prepare your business for incorporations. If you operate only in one state then you should incorporate in that particular state. If you have one business in multiple states you can choose from the state that is the most business friendly.
You then need to select a corporate name. You can check with your Secretary of State to make sure that the name you choose is not already taken and if not, you can file the paperwork necessary to register your name. Most likely your name has to be registered as a DBA – Doing Business As name. This needs to be done before you file your corporate registration paperwork. You should also Google the name you are choosing to make sure it doesn’t interfere with any present business and look at any existing patents to make sure the name isn’t already taken by another company.
You need to then determine who will register the corporation. In your state that you file you will need a registered agent to receive corporate forms, and any necessary paperwork. It could be you, an attorney, or a service that you can hire specifically for this. They must be able to verify that they live in the state you are filing in. You can also use this person to file the paperwork that you will need. It can be through self-filing, a business attorney, or through an incorporation service. Obviously, self filing is the least expensive, but for someone who has never done this before it can be overwhelming, and if not done correctly it could cause more harm than good. Using an incorporation service is recommended and will cost up to several hundred dollars. A business attorney will cost upwards of several thousand dollars.
Take the time to figure out how the stock will be structured and issued to the shareholders. There are different classes of stocks which give shareholders more preferential rights and have different voting. Depending on how many shareholders you have this can be a time consuming task which should be dealt with before incorporation papers are filed to make sure everyone is in agreement. Everything will be then put into the incorporation documents.
It is at this time that you want to prepare your corporation By-laws. These are developed to outline the procedure in which you operate. They cover how board members are elected, duties of the boar members, requirements of shareholder and board meetings, and much more. You should seek professional counsel to make sure your By-laws are done correctly.
Once you select the board of directors and file for an Employee Identification Number (EIN) with your federal government you are then ready to file your corporate documents. This is an exciting time but you should not rush into it until you are completely ready. Again, check with your Secretary of States to make sure you have all required forms and documents you need before you officially file.
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