The size of your business doesn’t matter, whether it’s a small business that you run from your home or a larger business with many employees, it’s always a good idea to learn how to incorporate your business. There are many benefits of incorporation, and many types of corporations for you to choose from. The one thing that you have to remember is that it doesn’t really matter the size of the business or the type of corporation you want to form, the steps are pretty much the same.
Just remember, that the exact steps will vary somewhat depending on not only the factors I’ve outlined but also on what state you choose to form your corporation in, and it doesn’t have to be formed in the state you live in.
I’m not a lawyer and can’t give out legal advice so use this article as a starting point only, you should always consult a lawyer before undertaking any legal matters.
Here are the basic steps you will need to follow:
1. Decide where you are going to form your corporation. You can form it in the state you live in or in another state if you think the benefits of doing so are worth it. For example, there are some states such as Delaware that are famous for their business friendly laws and practices. Many companies will choose to incorporate in Delaware for that reason. Again, your lawyer can help you figure out which option is best for you.
2. What type of corporation are you going to form, You can chose from a straight corporation to an LLC and various choices in between. Again, each type of corporation has unique attributes and benefits so make sure you know the difference so you can pick the best one for you.
3. Who is going to server as the officers of the corporation, How many shares of stock are going to be issued, At what price will the stocks be issued, These are all issues that need to be decided right from the start.
4. By contacting your local secretary of state office and filing a registration for the name you want for your corporation, they can let you know if that name is available or if it’s already been taken.
5. Again, visit the secretary of states office to find the exact instructions on how to file your articles of incorporation. The exact term when you are forming an LLC is usually referred to as something like ‘articles of organization’. For this step you’ll need to know the name of the company, what type of business it is, how long it’s expected to be in business (most people plan on being in business forever so for this you’d put something like ‘perpetual duration’, the names and addresses of the officers, etc. Sign and date it and send it back to the state.
6. After your corporation is formed you will want to meet with the board of directors to establish the company bylaws.
Depending on the exact type of corporate structure you choose to create as well as the state you live in, these basics on how to incorporate your business may need to be tweaked but this gives you a general idea of just how easy it is to incorporate.