How to set up a corporation
In order to start the process of incorporating your business, you should contact the secretary of state or the state office that is responsible for registering corporations in your state. Inquire about the forms, the fee the instructions that you need to follow.
In most circumstances it is advisable to use an attorney for legal advice as well as to guide you during the process of incorporating a business. The amount of paperwork that needs to be filed and the information that needs to be provided to the state office is often complicated. You can do the entire process yourself and save yourself the expense of using a lawyer which can cost anywhere from $500-$1000 but doing it yourself may take more time and also there is a chance that you could leave out some important detail or some point in the state law which could result in delay in the approval.
In order to get an idea of what you need to do to incorporate a business you can use books and software initially. Your expense will be the cost of these resources, the filing fee and other costs associated with incorporating a business in your state if you decide to do the whole process yourself.
The 1st and important step in incorporating a business is to prepare a certificate or article of incorporation. You can get a printed copy of this in certain states which either you or your attorney can complete. The information that needs to be provided on this certificate includes the name of the Corporation, the purpose of the corporation., The names and addresses of those incorporating and the location of the principal office of the Corporation. You will also need a list of bylaws that describe in greater detail than the article how the corporation will run, including the responsibilities of the company’s shareholders, directors and officers as well as other information such as when the stockholders meetings will be held etc.
Once your certificate of the Corporation has been submitted and duly accepted, the secretary of the state’s office will send you a certificate of incorporation.
Once you have managed to get your business incorporated it is equally important to stay updated with the laws and regulations in your state. It is equally important to follow these laws and regulations because any violation of these laws could result in legal hassles. Noncompliance wit the state regulations can enable a court to byline the corporate veil and hold you and other business owners personally liable for business debts.
You should always keep accurate financial records as required by the rules and regulations. Usually the accounting procedure is specified for a Corporation and how its supposed to maintain its income and expenses records.
The Corporation should also issue stock, file annual reports and hold yearly meetings to elect company offices and directors even if they’re the same people as the shareholders. Be sure to keep the minutes of shareholders and directors meetings. On all references to your business such as contracts, letters make sure to identify it as a corporation using Inc. or Corp. whichever your state requires.
Any letter or document that is signed by any of the officials of the company should be followed by the name of the company after the personal signature. Make sure your banker, clients and any other person whom you’re dealing with those that you as an officer of the Corporation and not acting on personal liability.